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Roy,

First, thanks again for all your help in this matter.

now from your latest response:
I said:
<<3. Find an 'employer of record' company - I thought about this when I first went 'independent' contracting. They will be your employer for a fee. Need a job - buy one! Then I won't be related to my employer and I can take per diem - but I think I'll be sacrificing my SEP, back into 401k land - but it might be worth it. There may even be some economies of scale here(they do payroll, etc...).>>

You replied:
Certainly something that you might want to look into.

My conculsion: After some preliminary research - this option doesn't look that good - these companies would charge me in the range of 12,000/year. Since my actuals are roughly 1/2 of the per diem I was trying to use - I'd be spending 6k after tax to save 5k after tax - I end up a net loser.

You also noted:
Wow...really? From what you have said in the past, you are well in the combined 50% tax bracket. Saving a $50 receipt will save you $25 in taxes. That entire process of saving and logging the receipt may take...what...10 minutes maximum? That equates for an hourly rate of $150/hour for your second job...keeping and logging your receipts. Seems like not a bad rate to me. But that's up to you.

And...don't forget...there is also a provision that will allow you to deduct meal and enternatiment expenses if they are less than $75. You would have to at least keep a log of the expenses...but you might be able to get away from keeping the receipts. This is also explained in the IRS Publications. Make sure to check it out.

And I reply: You are right - saving receipts and looking into the use of the 'no receipt needed if expense under $75 if action logged' - are definitely something I should do.

I have a strong aversion to paperwork, busywork, etc... but what this really comes down to is a significant tax savings. NOT taking advantage of this due to laziness makes all of my other LBYM activities seem pretty silly - I'm being 'penny wise(small w) and pound foolish(small f)'.

Time for me to beat myself into some discipline. Its worth it. Time to get a notebook or binder.

One thing in your reply has me a little confused though:
Fine...but remember that the 1099 that you receive from the company SHOULD include your billing AND your expenses. Your 1099 form will show a total amount for both of these items. And it'll be your responsibility to report your travel and meal expenses in order to "net out" your net income on your corporation tax return.

My situation calls for no 1099's as I understand it. As a corp - there is no 1099 from my client to my corp. They report an expense - my corp reports revenues. If I was working under my Social Securty number for the client as a contractor - I'd get a 1099. Working under my SS# for my own corp - I get a W2 - I'm an employee of a consulting corporation I happen to own.

As for my 'pay' and reimbursement. I get a W2 from my corp for my salary. My submissions to my corp for expense reimbursements are documentation of business expense for my corp's tax return. The reimbursement of these expenses from my corp to ME is not a taxable event - thus - no 1099. As an S Corp - the net from my corp flows down to my tax return.

I'm pretty confident on this one. Is there reason for a 1099 somewhere? From my S-Corp to me for expense reimbursement? From my S-Corp to me for Distribution of Profits(Dividends)?
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