new job, I have seen some positions that are asking for the Dentist to work as
an Independent Contractor.
familiar with an Independent Contractor position.
I am looking for some big pros and cons to
taking a position as an Independent Contractor vs Employee.
Mainly the tax implications and what would be appropriate to ask for in
compensation between the two.
implications? To be brief, as an employee your employer pays half of your self
employment tax, as an IC you pay all of it though only on the net taxable
amount (after your business deductions and a deduction for half of your SE tax).
in compensation as an EE vs IC,
generally about 2-3%. So, if you get offered 30% as an employee, the employer
could afford to pay you 32-33% as an IC and have about the same cash outlay.
terms of other proscons of IC over EE:
choose the business deductions you have and they’ll be 100% deductible
(assuming their all legit). Though with a flexible employer you can get the same deduction
benefit from them at no cost to them PLUS they get to save payroll taxes.
possibility of a retirement plan JUST for you (though you need to be careful if
your deemed to “share” employees).
choose your entity.
associated with creating an entity and maintaining it.
- As an
IC you won’t be eligible for employers benefits for their employee.
- And there are many
more….too much to write and all I can think of off the top of my head.