Any thoughts on what avenue to go down?

The 1099 has ZERO benefits, having worked for small companies I'm used to it, upside is I can now write off some expenses.

W-2 is full time in office, a 20 min drive for me every day, many benefits.

W-2 pay is slightly more

Somewhat

I think the only reason I'd go the 1099 route is in the event I was going to take on multiple roles/contracts/projects/jobs...whatever you want to call it.

How much more?

Nm

Absolutely take FightinTAC08's advice and learn from my screw up at the same time. I took 9% increase in pay to go to a 1099 job last year, 100% remote. I've calculated that I took a small pay cut due to not fully doing my research until after the fact. You have to save and pay your taxes quarterly and they're higher due to paying the other half of Social Security / Medicare that W2s don't pay.

if it were me I'd be asking at least 20% over a comparable W-2 job (assuming no other factors).

but really its based on all the facts and circumstances of what you value. for one job i might take a pay cut. for another i might demand a premium because of the soul sucking work or commute. right now my values are being home in the evenings for time with my kids. pay would take a backseat to time at home.

WFH vs Full Time Office has many varying benefits which only you can determine. BTD pointed out many great things about WFH. but after I worked at home fully remote for two years I couldn't stand it. I have a hybrid role now and enjoy being in the office 3 days a week (I found a new job for less hours though, not because i disliked being remote)


ETA:
also for the 1099 gig, how much in expenses depends on the field/industry.my wife is a 1099 contractor. Her expenses are negligible because its basically a computer based home role so I don't even track her expenses. a "home use deduction" of an at home office for your tax return deduction requires "exclusive and regular use" AKA dedicated square footage with no other personal use. so maybe you have a sliver of your phone bill, a sliver of your internet bill, some travel expenses here and there? that tracking headache takes time and effort as well.

you could also ask for reimbursed expenses from the company if you have true out of pocket costs.

crane said:

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Any thoughts on what avenue to go down?

The 1099 has ZERO benefits, having worked for small companies I'm used to it, upside is I can now write off some expenses.

W-2 is full time in office, a 20 min drive for me every day, many benefits.

W-2 pay is slightly more

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You'll really need to think this through.

This is a good place to start calculating the difference or equivalent.

https://www.viewthenumbers.com/w2-vs-1099

Here's some costs you have to build in just off the top of my head having had to deal with both types of employees and my wife now going self employed to break even to a W2 salary.

• 7.65% for the employer half of FICA taxes
• Potential bonus for salary not in 1099?
• 401K match or contribution by employer for salary employees
• Pension for employees
• employee insurance contribution
• Car allowance / company car
• cell phone
• internet
• printing equipment and supplies, computer, monitors, desk / furniture to set up the office and / or lease space
• Microsoft teams subscription (however they communicate)

And I'd want to make sure remote actually means fully remote. Not traveling to an office here or there or for meetings.

If someone wanted a number from me on the spot without me being able to break it down in excel I'd probably start at 150% of the salary number. It wasn't unheard of for our contractors (especially those with experience at my former company and didn't need a lot of hand holding or training) to make 150%-200% of salary employees as the only cost was the 1099 salary.

But in reality you're only an extra 7.5%. Those taxes come out of your paycheck regardless no?

Don't forget you lose paid sick days, paid vacation days, any company match on retirement, any employer healthcare payments for you or your family, etc with a 1099 job as well.

W2 taxes come out automatically. 1099 he is saying you have to pay quarterly out of pocket (you will have to set this aside as it is not taken out of your paycheck).

You have to be disciplined not to spend the tax money that belongs to Uncle Sam or you will be in a hole. Could be up to 25% or more of your check with the 7.5% medicare / ss...

this was randomly at the top of my reddit feed.

https://www.reddit.com/r/personalfinance/comments/17awh0j/my_wife_just_got_offered_the_opportunity_to_go/

aggiez03 said:

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Don't forget you lose paid sick days, paid vacation days, any company match on retirement, any employer healthcare payments for you or your family, etc with a 1099 job as well.

W2 taxes come out automatically. 1099 he is saying you have to pay quarterly out of pocket (you will have to set this aside as it is not taken out of your paycheck).

You have to be disciplined not to spend the tax money that belongs to Uncle Sam or you will be in a hole. Could be up to 25% or more of your check with the 7.5% medicare / ss...

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This was the big one for us. It's one thing to schedule time off into your budget. It's another if your client cancels because they are sick or out of town, etc. and you didn't plan for that in your budget.

Of course, that isn't a factor for everyone if you are still working in corporate and can just plug in the holiday schedule for the company. But for someone like my wife who is meeting with private individuals it's not uncommon, yet hard to predict.

BTD said:

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WFH. Easy answer.

Office job.
Dry cleaning.
Gas, oil changes, car depreciation.
40 minutes of life lost on commute.
More likely to need health insurance when you eventually get into a fender bender. Not to mention the uninsured motorist who will sue you.
Lunches with coworkers.
Pooping at the office.
Small talk.
People walking into your office uninvited.
I could go on.

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This seems extremely short sighted to me…

htxag09 said:

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BTD said:

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WFH. Easy answer.

Office job.
Dry cleaning.
Gas, oil changes, car depreciation.
40 minutes of life lost on commute.
More likely to need health insurance when you eventually get into a fender bender. Not to mention the uninsured motorist who will sue you.
Lunches with coworkers.
Pooping at the office.
Small talk.
People walking into your office uninvited.
I could go on.

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This seems extremely short sighted to me…

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It's personal opinion and subjective.

I used to be a hard charger first in the office, put in a full day, be the best employee kind of guy.

Half my day was wasted to water cooler talk or meetings I got pulled into just because I was there. Constant interruptions that led to me backtracking or double checking for errors because I had to stop what I was doing at the whim of someone else. Covid and International corporations day to day operations proved being an office and in person communication was often an unnecessary crutch.

Can it be important for dealing with problems or planning big projects? Sure.

Is it really necessary on a daily basis? Not at all.

We all have cell phones, and email, and messaging, and a 100 other ways to communicate. Usually in black or white without people interpreting conversation differently or constantly interrupting conversations when it's in writing (which is half the battle of in person meetings or phone calls).

I get more done in a half day at home, than I often do in a full day at the office. And it's higher quality work, I get time to work out and make my meals to save money, and I don't HAVE to deal with annoying people that everyone wishes they could avoid at the office.

And since most large companies have done everything possible to take the intangibles and personal out of work through evaluations and road blocks for raises and promotions, playing office politics is less and less important than being an above average performer on paper.

So if you can make similar money. Not have to get up an hour earlier, wear down a car, deal with people you don't want to unless necessary, each cheaper and more healthy, have more opportunity to work out or be productive in down time, the average person is going to take it. And wonder what the heck is wrong with people who would rather be in an office and purposely spend time away from their family.

AgLA06 said:

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htxag09 said:

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BTD said:

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WFH. Easy answer.

Office job.
Dry cleaning.
Gas, oil changes, car depreciation.
40 minutes of life lost on commute.
More likely to need health insurance when you eventually get into a fender bender. Not to mention the uninsured motorist who will sue you.
Lunches with coworkers.
Pooping at the office.
Small talk.
People walking into your office uninvited.
I could go on.

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This seems extremely short sighted to me…

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It's personal opinion and subjective.

I used to be a hard charger first in the office, put in a full day, be the best employee kind of guy.

Half my day was wasted to water cooler talk or meetings I got pulled into just because I was there. Constant interruptions that led to me backtracking or double checking for errors because I had to stop what I was doing at the whim of someone else. Covid and International corporations day to day operations proved being an office and in person communication was often an unnecessary crutch.

Can it be important for dealing with problems or planning big projects? Sure.

Is it really necessary on a daily basis? Not at all.

We all have cell phones, and email, and messaging, and a 100 other ways to communicate. Usually in black or white without people interpreting conversation differently or constantly interrupting conversations when it's in writing (which is half the battle of in person meetings or phone calls).

I get more done in a half day at home, than I often do in a full day at the office. And it's higher quality work, I get time to work out and make my meals to save money, and I don't HAVE to deal with annoying people that everyone wishes they could avoid at the office.

And since most large companies have done everything possible to take the intangibles and personal out of work through evaluations and road blocks for raises and promotions, playing office politics is less and less important than being an above average performer on paper.

So if you can make similar money. Not have to get up an hour earlier, wear down a car, deal with people you don't want to unless necessary, each cheaper and more healthy, have more opportunity to work out or be productive in down time, the average person is going to take it. And wonder what the heck is wrong with people who would rather be in an office and purposely spend time away from their family.

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And this is exactly why I said it's short sighted (person I was replying to, not you). Being that it's a 1099 job with no benefits and less pay, that essentially negates any financial benefit of wfh and then some.

Yes, there are other perks and there is more than just money. But with the above, saying you save money on fuel and car depreciation is a nonstarter. And, again, shortsighted if you aren't figuring how much you'll have to spend for medical insurance, retirement, etc, not to mention the pay gap.

To be fair I had zero benefits at my last job so if anything I can now write off health insurance so it's a wash

I guess all I'm saying is, if you have to do a break even analysis to figure out how close the pay is, then for me, the pay is close enough to take the wfh.

White collar office jobs are antiquated, and I wouldn't respect a company u that would demand anything more than hybrid.

Live the dream, work from home if you can.

I started my 1099 journey several years ago now. There was a time in O&G when contract gigs were all you could get. Degreed professionals had the option to work 1099 or not work. Most of those had 'plans' to pivot into W9 jobs, but most didn't. The downside, I found, was lack of benefits. However, the upside is that when I was working my white collar 1099 job "40 hours a week", I was also doing real estate, roofing, and I had another side business we were starting up. I had my own office and aside from getting my work done, I used that for my other businesses. For a 1099, they don't get to dictate my hours (unless pre-agreed). I worked weekends, at night, over lunch, whatever it took to get my assigned job done per the contract stipulations. When deadlines got tight, all of us got overtime pay. From there, I made sure my CPA and finances were up to date and the tax burden could be lessened to the point that it was a non-issue.

Eventually, that contract job died because the company went bankrupt. But, because I had been working my other jobs at the same time, i had built that customer base and simply rolled over to those. Eventually, Real Estate fell off, and roofing is where I settled. I am 100% in charge of my schedule, income, and can't be fired short of stealing from the company. While I have to cover my own insurance, I don't think I could work for W9 ever again.

Personally, I would go 1099 and work from home. Work two 1099 from home. Work three. Do what you want.

And yes, I would take a pay cut to work from home if that was my option. To be able to roll out of bed at 9:30 AM, grab your coffee and start working in your underwear without any office horse hockey and traffic is worth the loss. It is. The money you lost will be saved by not eating out at lunch or whatever.

Office jobs, with the exception of some roles, are a dying concept. It's not necessary. We have phones, zoom, email, high speed internet anywhere in the world just about. You simply don't need to be in the office for many roles.

Estimate of good benefit packages is in the 30%-35% of the base salary. W2 option is typically best, especially if they pay a substantial amount of health insurance.

If you go 1099, I would recommend setting up a LLC and getting a good CPA.

falconace said:

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If you go 1099, I would recommend setting up a LLC and getting a good CPA.

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And insurance.