Guys, is it better to take 80 percent on a hourly rate, or take 85 percent paying ssa and medicare yourself? Math nai garna garo bho, lets say the billing is around 80 an hour.
maxpayne · Apr 4, 2016 2:23 PM · 10,304 views
Are you planning to go home soon or retiring here? If retiring here start taking ss and put money on retirement.
magorkhe1 · Apr 4, 2016 2:55 PM
In short , you are saying work on W2 or 1099 right? I would say work on W2.
sajhamitra · Apr 4, 2016 3:08 PM
Look at the tax consequence ? You have to file self employed and has to pay self-employment tax if you work as contractor.
magorkhe1 · Apr 4, 2016 3:23 PM
Still w2. I'm talking about employer side contribution for SSA and Medicaid.
maxpayne · Apr 4, 2016 3:39 PM
Let's assume you make $80 per hour for 2087 hours. If you take 80% your income before federal and state tax = 80 x 2087 x 80% = $133568 Max. Taxable SSI = 7347 ( completely phases out at $ 118,500) Medicare = 133,568 x 1.45% = 1937 Income before other taxes = 133568 - 7347 -1937 = 124,284 Now let's say you take 85% (i.e. 1099) Income = 80 x 2087 x 85% = 141,916 SSI MAX. = 118500 x 14.4% = 14694 Medicare = 141916 x 2.9% = 4115 Income before other taxes = 141916 - 14694 -4115 = 123,107 So, for this assumption, they are pretty close. If you make than this level, it's better to have W-2. If more than this income or like lots of overtime, 1099 will win. However, you have to factor ither stuffs like paid vacation, sick pay, health insurace, etc that comes with employee status.
nepalijeevan · Apr 4, 2016 4:33 PM
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