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1099 vs w2 if new tax law passes

Home Tax Reduction 1099 vs w2 if new tax law passes

  • One Wet Bandit One Wet Bandit 
    Participant
    Status: Physician
    Posts: 47
    Joined: 10/14/2017

    If the new tax law passes, how would that affect the advantages/disadvantages of 1099 vs W2 jobs?  When comparing job offers should we now lean more towards w2 if salaries are similar?

    #72992 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    looks like

     

    #72993 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016

    Not necessarily. For example, if you have no or low match with the W2 job and you can stick $54k into a solo-k and the 1099 pays for your medmal, then it might get down to comparing the cost of self-insuring for health versus the lost 401k opportunity. If you are covered on your spouse’s health plan, it makes it a bit easier.

    otoh, if you are considering academic and have a 403b/457b combo and the pay is the same (doubtful), you’d lean toward W2.

    While you (as of now) won’t qualify for the small business preferential tax bracket, your taxable income brackets will be the same whether you are IC or W2.

    At least that’s my understanding. Unusual for me to disagree with Zaphod – what am I missing?

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #73037 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    Not necessarily. For example, if you have no or low match with the W2 job and you can stick $54k into a solo-k and the 1099 pays for your medmal, then it might get down to comparing the cost of self-insuring for health versus the lost 401k opportunity. If you are covered on your spouse’s health plan, it makes it a bit easier.

    otoh, if you are considering academic and have a 403b/457b combo and the pay is the same (doubtful), you’d lean toward W2.

    While you (as of now) won’t qualify for the small business preferential tax bracket, your taxable income brackets will be the same whether you are IC or W2.

    At least that’s my understanding. Unusual for me to disagree with Zaphod – what am I missing?

    Click to expand…

    I am just thinking of the healthcare side of things mainly. If things pass remotely similar, wife will be going part time solely for that reason.

    #73045 Reply

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