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Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 647
Experience:  Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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I am going to work for a contracting company that states they

Resolved Question:

I am going to work for a contracting company that states they are treating me as a 1099. I am in Colorado, I do have a small business LLC my understanding is the following and please confirm:
1) as a 1099 they will not pay any taxes including SS?
2) should I list myself as my LLC and pay the SS out of that or stay as an individual 1099
3) If I list myself as my LLC could I then claim I am doing consulting work under my LLC name on resumes and that would be considered truthful?

Thank you
Submitted: 2 years ago.
Category: Tax
Expert:  Phillip B, EA replied 2 years ago.
Thanks for using Justanswer.com!

1.) Correct. When a payor gives you a 1099-MISC rather than a W-2, you become responsible for all Social Security and Medicare tax associated with that income. For the remainder of 2012, the Self-Employment tax (SS and Medicare) rate is 13.3%. The rate jumps back to 15.3% on 1/1/13.
2.) From a tax standpoint, unless your LLC has elected to be treated as a S-Corp, it doesn't matter if you take the 1099 under your LLC or under your own name. You will (most likely) pay the same in income and self-employment tax.
3.) As far as I know, it is perfectly acceptable to include the work done in your own business on a resume. The most acceptable employment title for this situation on a resume, would be "owner" or "managing member".

If there are any other questions or concerns, please reply to this answer so that I may assist you further.

If this answers your question, please rate my performance between OK and Excellent so that I may be paid. Thanks again for using this site.
Customer: replied 2 years ago.


Thank you so much, for the information one more question. How can I start now by paying the 13.3% for SS and Medicare? Where do I have to go to for forms etc.


 


Thank you

Expert:  Phillip B, EA replied 2 years ago.
You can pay prepayments to the IRS by check using form 1040-ES (www.irs.gov/pub/irs-pdf/f1040es.pdf), and mailing the form and the check to the following address for CO:

Internal Revenue Service
PO Box 510000
San Francisco, CANNN-NN-NNNNbr/>
You can also pay online through a third party service provider through this IRS site: http://www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card

Let me know if there is anything else that I can do for you.
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 647
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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Phillip B, EA
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Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.