No. of Recommendations: 1
Hey Lemongirl,

As a W-2 employee, the employer will be responsible for taking taxes out of your paycheck and paying half of the 15.?% FICA tax. You will be classified as "employee" and they would also be responsible for any unemployment taxes levied on the employer as well as paying for Workman's Comp on your salary.

As a "1099" employee, you won't be an employee at all. You'll be a sub-contractor. The commissions you earn will be reported to you on a 1099 at the end of the year and you will be responsible for self-employment taxes (the full 15.?% FICA). You will not be covered with any benefits - no workman's comp or unemplyment - but you are covered by your primary employer.

As far as LD phone calls are concerned, and other office expenses, you can write them off on your "Schedule C" at tax time, and those expenses will be used to reduce your 1099 income. I guess I would ask what would happen if you made $1000 in LD calls and got no takers? You're out of $1000 in LD charges - but that's the risk you take in being in business for yourself!!

Make sure that the commission percent is a good one. You need to make this relatively "risky" adventure pay off for you. Remember to calculate the taxes you'll have to pay and other expenses you'll have to incur.

Good Luck!
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