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  1. #1
    Join Date
    May 2008
    Posts
    10

    Question Working As 1099 Employee or Form LLC

    I have an offer to be a consultant on a DOE project. Payments will be made monthly, there will be no withholding. From what I understand I will be considered a 1099 employee. An independant contractor.

    My question is this. Would I be at an advantage to form an LLC. Since I will require a vehicle, phone, laptop, as well as other incidentals. What would change if I incorporated vs just being a 1099 employee? I was thinking I could purchase those items with a corporate credit line and they would be property of the company.

    Secondly. I am a resident of Florida where I lease an apartment however the jobsites will require long stays out of town, months at a time or possibly over a year. Can living expenses be deducted? Would I incorporate in the state I work or my home state. Its a bit confusing since there are multiple projects in 3 different states.

    This is my first foray into consulting at the dollar level I am being offered. I have provided services in the past for $1000 for a visit to a project and simply added the 1099 income to my income tax return and its a bit intimidating with the tax implications and such. The last people I want to run afoul of is the IRS. I of course also want to give them as little of my money as I have to.

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Working As 1099 Employee or Form LLC

    If you want to find out if there are tax advantages or other financial advantages to forming an LLC, based upon your industry, your planned expenses, and your projected earnings, you should consult a financial professional (e.g., an accountant) about your business. Incorporating adds a level of complexity and paperwork to a business, and may increase the costs of doing business.

    If you expect to make $1,000/year, I would expect it to make more sense to continue to work under a 1099. If you aren't sure about the deductions you're trying to take, again, consult a financial professional - an accountant or tax preparer.

  3. #3
    Join Date
    May 2008
    Posts
    10

    Default Re: Working As 1099 Employee or Form LLC

    I will be talking with a business accountant. Compensation will be between 80 and 95k per year. The main idea is to keep as much of that as possible. I am also interested in having assets in the businesses name as well as a business line of credit.

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