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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12490
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
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I may have the opportunity to switch to a 1099 from W2. I

Resolved Question:

I may have the opportunity to switch to a 1099 from W2. I need to consult a tax professional about possibly using an LLC or S corp. How do I vet an accountant to make sure they are the best one to handle this transistion? Thank you.
Submitted: 8 months ago.
Category: Tax
Expert:  Megan C replied 8 months ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

The first thing you can do, is contact your state's board of accountancy to get a listing of licensed professionals in your area.

Megan C :

From that list, find the ones that have offices (some CPAs work in industry, and won't have an office) by reviewing your local yellow book

Megan C :

Run a check with the board of accountancy to make sure their license is in good status. You can also search to ensure that they have not had any disciplinary issues.

Customer:

I am fine. How are you? Thank you.

Megan C :

After you find a couple of professionals, then you can start asking them questions

Megan C :

How long have they been in practice?

Megan C :

Do they specialize in any type of industry?

Megan C :

Do they provide primarily tax advice, or are they also auditors?

Megan C :

Find one that works with companies your size

Customer:

great! Thank you! what should I expect to be charged for a consultation?

Customer:

once I find an accountant.

Megan C :

Some will talk to you initially for free. I wouldn't pay more than $250.

Customer:

excellent! Thank you so much!

Megan C :

You're welcome. Is there anything else that I can assist you with today?

Customer:

Is there anyway I could compare my w2 effective tax rate to the 1099 situation on my own?

Customer:

any calculators?

Megan C :

Your income tax should be the same, it's your self employment tax that will be different.

Megan C :

Take the Social Security and Medicare payments on your check stub and double them...and that's roughly your self employment tax

Megan C :

if you are getting paid the same.

Customer:

what about child credits and interest deduction, I can't take those if I am LLC or s corp?

Megan C :

You can also play with the TurboTax Taxcaster, HERE

Megan C :

No, you will still be able to take all the same deductions as an LLC or S Corp

Customer:

ah nice! Thank you!

Customer:

have I asked too many questions yet?

Megan C :

No you have not :-)

Megan C :

An S Corp will help you minimize your employment taxes. You will pay yourself a salary from the S Corp, and you only owe employment tax on that wage.

Customer:

I guess my biggest concern is that my take home is the same or better if I go 1099. I will have to buy health insurance. i suppose the accountant will be able to run the scenarios?

Megan C :

They should be able to run all the scenarios for you with more information

Megan C :

I typically try to get W-2 gigs where I can. But, that's just my preference

Customer:

great! You have been very helpful! Worth the money! Thank you!

Megan C :

Some like the 1099 gigs because you can write off various expenses

Customer:

I have to shop for HI that has a certain benefit. W2 right now, not cutting the mustard with the Health insurance

Megan C :

I see. It is hard to get good healthcare coverage any more.

Megan C :

Hopefully they nix that awful healthcare bill.

Megan C :

I hope the next person in office does away with it

Customer:

actually, it could work to my benefit the way it is structured in WA, that is why I want to switch

Megan C :

That's good :-) Glad it's helping some out! Most my clients are getting hurt by it

Customer:

sorry to hear that.

Megan C :

It's fine...things change...you just have to roll with the punches and make the best business decisions possible for the climate.

Customer:

thanks again. I think I have what I need. very true. Take care. :-)

Megan C :

You too. If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

You got it!

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12490
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Megan C and 5 other Tax Specialists are ready to help you
Expert:  Megan C replied 8 months ago.
Thanks, Christopher for your positive rating. Please come back and visit me any time you need a tax question answered. It was a pleasure working with you today!

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