Hi all. I've read every MMM post and have been living FI for about a year now. My biggest obstacle right now is paying taxes, (I see taxes as a cost, and quite a big one being single making a decent amount of money)
I'm a Mechanical Engineer and have about 5 years of experience, and an opportunity has risen for me to become a contractor. This is an existing company that wants to hire me as an employee, but certain things (like not offering a 401k plan) make direct employment unrealistic for me.
What I am trying to figure out is what becoming a contractor really means and what type of costs and rules are associated with contracting work to a company, that I would be working for exclusively for the foreseeable future.
Things I know:I will be the only employee of my company
I would invoice the company and they would give me a 1099
Being a Contractor costs:health insurance
workers comp?
liability insurance?
self employment tax
income tax
Things I can roll into my hourly rate as a contractor:base pay
social security tax
medicare tax
federal unemployment tax
state unemployment tax
medical insurance
dental insurance
pto/holiday pay
hardware/software my company provides
I found this article that has explained a little bit of it, but this feels like the tip of the iceberg.
http://wealthyaccountant.com/2016/01/28/the-llc-vs-the-s-corporation/Things I am unsure of:What rules need to be followed to be legal. As far as I can tell I just need to supply hardware and software (computer and programs), and the company can tell me what they want done and when, but have no control over when I work or how I work.
A big question that comes up is working on site (in their office building) if there are any limitations on that, or what the workaround is.
What kind of company would I be? an LLC or a S Corp or Sole proprietorship?
Can I have an email address of their company?
Would this work out in my favor if I gross $100k per year?