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W2 or 1099 or LLC

267 89 January 28, 2024 at 07:55 AM in Finance
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Hello, I am planning on taking a 2nd job and I am wondering if working on W2 or 1099 or corp to corp LLC is better and why? Reading up about this online and there are all kinds supporting all 3 are better depending on the site 😊

Also can I work on 1099 without an LLC? What are the benefits of 1099 Vs LLC?
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slicbrat
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Joined Oct 2010
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> bubble2 6,348 Posts
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YanksIn2009
01-30-2024 at 02:24 AM.
01-30-2024 at 02:24 AM.
The internet is your friend:

https://www.brokeruniverse.com/llc/1099-vs-llc/
https://www.llcuniversity.com/llc...-by-state/


Generally, unless it is a small amount of money and there is little risk of liability\being sued, it is better to get an LLC and take full advantage of the liability shield and tax write offs\credits allowed imo (though I am no accountant). The down side is the cost to form the LLC (one time cost), cost to maintain it annually (depends on your state as it may be a minor annual report fee of $15-30 up to 800+ dollars in the PR of California for ex lol...see link), added paperwork, cost to file a corporate tax return each year and potentially if your liability risk is high enough, the cost of an umbrella insurance policy. However, you do get to write off a bunch of stuff and potentially get a 20% exemption on the income (though that is subject to a max threshold).

My 2 cents.
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Joined Jun 2005
Let Sleeping Dogs Lie
> bubble2 8,673 Posts
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komondor
01-30-2024 at 05:00 PM.
01-30-2024 at 05:00 PM.
Well if you do a 1099 you have to pay your own social security and other taxes, so you need to put in the numbers and see how it works for your situation. Considerations are your tax bracket, how much you are making, and what you can expense.
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m3coup
02-28-2024 at 12:29 PM.
02-28-2024 at 12:29 PM.
Quote from komondor :
Well if you do a 1099 you have to pay your own social security and other taxes, so you need to put in the numbers and see how it works for your situation. Considerations are your tax bracket, how much you are making, and what you can expense.
If you already maxed out the FICA on W2, do you still have to pay that doing a 1099?
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Joined Jun 2005
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komondor
02-28-2024 at 04:57 PM.
02-28-2024 at 04:57 PM.
No if you are maxed out you do not need to pay that but a w2 has other taxes too.
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blackmarlin8
04-28-2024 at 10:36 PM.
04-28-2024 at 10:36 PM.
Depending on how much you getting and for how long,
If small amount or short term then w2,
if large amount or loong term then 1099 on LLC

1099 LLC has lots benefits on taxes, Few years back, Trump Admin passed law where you pay fed tax on only 80% of total income also some states passed law (MD/VA etc) where you can pay personal state tax from LLC and claim that as an expense on LLC. And there are many more similar benefits
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MasterRigger
07-30-2025 at 01:56 PM.
07-30-2025 at 01:56 PM.
Quote from YanksIn2009 :
The internet is your friend:https://www.brokeruniverse.com/llc/1099-vs-llc/https://www.llcuniversity.com/llc...-by-state/Generally, unless it is a small amount of money and there is little risk of liability\being sued, it is better to get an LLC and take full advantage of the liability shield and tax write offs\credits allowed imo (though I am no accountant). The down side is the cost to form the LLC (one time cost), cost to maintain it annually (depends on your state as it may be a minor annual report fee of $15-30 up to 800+ dollars in the PR of California for ex lol...see link), added paperwork, cost to file a corporate tax return each year and potentially if your liability risk is high enough, the cost of an umbrella insurance policy. However, you do get to write off a bunch of stuff and potentially get a 20% exemption on the income (though that is subject to a max threshold).My 2 cents.
all great points. The liability shield in a LLC is only applied to creditors. You are still liable for personal liability, injuries.A Llc is a great and affordable way to use the many tax deductions afforded to businesses which overall reduce your taxable income vs a 1099. In Florida the total cost of a new llc was only $165 for comparison. Yearly filing fees are very low as well.
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