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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > w2 vs 1099
Expert: Helen P. O`Planick, EA
Date: 9/14/2008
Subject: w2 vs 1099
Question
I am in orthopaedic sales. The company I work for is changing owners basically. New owner say everyone is going to be 1099. Presently I am salaried w2. I make 52000 a year. The company pays all medical and dental benefits for myself plus one child. I am a single father of one dependent in PA.
1. what is the rule of thumb for this. I have read 30 to 35%. If this is the case I should ask for 70k to 67k a year. Is that a good rule of thumb.
2. what are the differences going 1099 or should someone like myself incorporate? Is one better then the other.
This is uncharted territory for my.
Thanks for your time
Answer
Mark, they cannot do this. What you need to do is tell them you are going to call your local unemployment office to get a ruling. You will be paying extra taxes, not have unemployment or worker's comp.
What company is this? I have a few clients in the same field and maybe I can help stop this before it goes too far.
Helen, EA in York PA
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