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W2 employee blues

Home Tax Reduction W2 employee blues

  • Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 730
    Joined: 06/18/2018

    “We also get about 1000$ due to salary being over the IRS limit for the match per year as a paycheck.

    So, you signed up to work somewhere that forbids you moonlighting, needlessly restricts CME, and is too stupid/cheap to make their 401k safe harbor compliant? Being paid as a W2 isn’t the fundamental problem there.

    You seem unhappy with the comp setup now that you’re filing your taxes. Was this not forseeable when you signed on? Have you started applying to other jobs?

    #205243 Reply
    Liked by Moomoo, Tim
    Phoenixdown99 Phoenixdown99 
    Participant
    Status: Physician
    Posts: 160
    Joined: 03/20/2017

     

    In other words, as a 1099, you get to write off all sorts of “business expenses,” but if they’re truly business expenses with no personal benefit, it’s hardly better than paying tax.

     

    Click to expand…

    Yes, but for example I could deduct my home office — apparently cannot do that now.

    As for the job, I took it b/c of a good base salary, good patient population, location near friends and family, and because I am not ready to commit to starting a private practice yet since I am not sure if I want to stay in the area long-term just yet. Probably will, but not totally sure.

     

    #205306 Reply
    Liked by Craigy
    Avatar soundsystem 
    Participant
    Status: Physician
    Posts: 58
    Joined: 12/14/2017

    For similar salary, 1099 comes way ahead since your effective tax rate is much less relative to W2. Of course, depends how you structure your ‘business’, but that it’s typically the case.

    #205373 Reply
    Avatar wcinewbie 
    Participant
    Status: Physician
    Posts: 92
    Joined: 09/30/2017
    Earnest refinancing bonus

    “We also get about 1000$ due to salary being over the IRS limit for the match per year as a paycheck.

    So, you signed up to work somewhere that forbids you moonlighting, needlessly restricts CME, and is too stupid/cheap to make their 401k safe harbor compliant? Being paid as a W2 isn’t the fundamental problem there.

    You seem unhappy with the comp setup now that you’re filing your taxes. Was this not forseeable when you signed on? Have you started applying to other jobs?

    Click to expand…

    Most contracts in my specialty that I have seen disallow moon lighting in medicine.  Contract basically says you work full time and all money generated doing your specialty belongs to the practice as part of your collections.

    #205382 Reply
    Avatar AR 
    Participant
    Status: Physician
    Posts: 873
    Joined: 03/10/2016

    I don’t really understand how an employer can prohibit a side gig and/or why anyone would sign a contract stating that. I’m not an expert, but this doesn’t sound like something that would hold up in court.

    With regards to the tax issue, I would be more concerned with my take home pay and how many hours/how hard I worked as compared to my previous path.

    Click to expand…

    I have a hard time understanding what you think a court could/would/should possibly do.

    Employer:  I’ll hire you, but you can’t practice medicine anywhere else

    Employee: OK

    Then employee decides to work elsewhere anyway.  Employer somehow finds out.

    Employer: I see that you decided to work somewhere else despite our agreement.

    Employee: Yeah

    Employer: Ok, well we don’t want that, so you’re fired.

     

     

    So what exactly is the employee going to ask the court to do here?

     

     

     

     

    #205384 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3341
    Joined: 09/18/2018

    @phoenixdown99,
    Glad you had the chance to peel the onion back and solve your discontent. It seems like the effective tax rate turned out better than ever. Getting that pesky CME in locally freed up time to actually take vacation. Now your not tied into having to find classes and screwing up the fun. Benefits too. You didn’t mention it, now you got the W-2 each time showing you how much you are saving on employment taxes. That must feel good.
    Location- check
    Compensation- check
    Great patient and work – check

    That home office thing was in your mind. You still got your desk, computer and everything. No more need to pretend you work in there. Free from the taxman!

    Not sure you want the hassle of running a private practice. Think of it this way: Sit 4 hrs in room for CME or just do the whitewater rafting thing for next vacation? Yep, work and play! Let someone else cleanup that virtually home office too! Congratulations!
    May the force be with you! You life is good. Go book that raft trip, just do it.

    #205391 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3341
    Joined: 09/18/2018
    Splash Refinancing Bonus

    @wonka31,
    “I don’t really understand how an employer can prohibit a side gig and/or why anyone would sign a contract stating that. I’m not an expert, but this doesn’t sound like something that would hold up in court.”

    Would you say the same for “non-competes”?
    Is an agreement for services or time or type of earning?
    No offense, you know better. I bet your contract has restrictions that you find weren’t there! Just saying.

    #205409 Reply
    wonka31 wonka31 
    Participant
    Status: Physician
    Posts: 715
    Joined: 03/24/2018

    @wonka31,
    “I don’t really understand how an employer can prohibit a side gig and/or why anyone would sign a contract stating that. I’m not an expert, but this doesn’t sound like something that would hold up in court.”

    Would you say the same for “non-competes”?
    Is an agreement for services or time or type of earning?
    No offense, you know better. I bet your contract has restrictions that you find weren’t there! Just saying.

    Click to expand…

    Actually there are endless accounts of non-competes not holding up in court.

    #205425 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3341
    Joined: 09/18/2018

    And endless number that are upheld and endless number of contracts that have them. It’s a restriction.
    Of course there is legitimate reasons for different interpretations, but I doubt seriously that “endless” applies. Some just decide it’s best to change their mind.
    The point is, why is it illegal to agree in a contract? Somethings are prohibited, exclusive work product is understandably touchy. The laws of a state come into play. I think you might be exaggerating non-competes.
    How many physicians do you personally know that have gone to court and WON! With all due respect, I would guess it’s pretty rare. More likely a bargaining chip in a separation agreement. Stuff happens. New agreement.

    #205431 Reply
    Liked by pulmdoc
    Avatar rmecc001 
    Participant
    Status: Physician
    Posts: 23
    Joined: 02/03/2016

    I don’t really understand how an employer can prohibit a side gig and/or why anyone would sign a contract stating that. I’m not an expert, but this doesn’t sound like something that would hold up in court.

    With regards to the tax issue, I would be more concerned with my take home pay and how many hours/how hard I worked as compared to my previous path.

    Click to expand…

    My employer also bans medical side gigs. Their justification is that they want us focused on the group’s patients. And I signed it because it’s a great job in a great location.

    #206334 Reply
    wonka31 wonka31 
    Participant
    Status: Physician
    Posts: 715
    Joined: 03/24/2018

    I suppose if it’s an in demand job/location, I can understand it as you lack leverage. Otherwise, it seems like unnecessary and inappropriate employer control unless somehow the side gig is in competition with your employer. ‘Medical side gig’ is a pretty broad area, I mean does helping to create a surgical instrument truly interfere with your clinical duties? Obviously if it’s a side gig that is in competition with your employer, it would not be appropriate imho.

    #206358 Reply

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