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Subject:RE: W2 to 1099 Conversion Rule Of Thumb? From:"Sharon Burton" <sharon -at- anthrobytes -dot- com> To:"TECHWR-L" <techwr-l -at- lists -dot- techwr-l -dot- com> Date:Thu, 2 Dec 2004 10:31:29 -0800
Having been a 1099 for most of my career, I can tell you the rule of thumb
that I and my bookkeeper use.
30% to 40% off the gross goes to taxes: 15% to Social Security taxes,
another 15% or more will go to State and Federal. The alternate minimum tax
will kill you and goes into effect after, I think, 50k.
Since I'm almost divorced (another 29 days!!!), 2005 is the first year I
will have to pay my own health insurance, which I am very excited about
(not) so that's another $2500 a year.
All that aside, you can get the hourly that the market will bear. And then
you figure out how to live on that and/or take several projects at the same
time to try to make it. The last few years have been horrible but it is
getting better.
And remember too, as 1099, no work, no pay. I don't like the holidays so
much because I generally don't work much for several of these weeks. So
always have enough money in the bank to float you for at least 2 months to
get you thru the tough times.
All in all, consult a tax person and hire a CPA. It's worth it in spades. I
have a CPA and a bookkeeper because I simply cannot wrap my brain around tax
issues. It's not what I am good at so I contract it out. And I do what they
tell me.
sharon
Sharon Burton
CEO, Anthrobytes Consulting
951-369-8590
www.anthrobytes.com
President of IESTC
-----Original Message-----
From: bounce-techwr-l-189020 -at- lists -dot- techwr-l -dot- com
[mailto:bounce-techwr-l-189020 -at- lists -dot- techwr-l -dot- com]On Behalf Of Gene
Kim-Eng
Sent: Thursday, December 02, 2004 9:54 AM
To: TECHWR-L
Subject: Re: W2 to 1099 Conversion Rule Of Thumb?
There are two separate issues here, one being what hourly
rate you'd need to bring in to equal the same income as a
W2 employee with benefits. The will vary anywhere from
+20% to +50% or more, depending on whether or not you
already have bennies from a "day job" or a spouse, and what
it will cost you to get coverage based on your specific needs
if you have to buy them.
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