Quote:
Originally Posted by nikkie
Thanks all. Guess I need to get on the boat with the right way to deal with money! I'm recently out of college, so the advice is greatly appreciated.
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There are 3 common ways to be a contractor at or around MS (I've been there, plus several other companies over the years)
1. (the most common at MS itself) You are the employee of a contract agency. They should take out your taxes, and usually also have access to a 401k, etc, even if they help don't contribute to it. Make use of such savings plans.
2. Independent Contractor. You are actually a business, and must procure a business license. You'll end up paying self-employment taxes, which effectively includes the employer's portion of the payroll tax. You should demand more money than you'd get if you worked with an agency. This really only works well if you have contracts with more than one company. You're responsible to set up some kind of retirement system.
3. Temporary Employee. The Company you work for still takes out taxes and such, but no other benefits. earnings *should* be reported to you on a 1099misc form, and you escape the self-employment tax. still no retire bennies.
Be careful how you do this. If you are an independent Contractor, AND you have only one employer/contract, then you must be very careful, or Washington may judge you a "statutory employee". It results in fines, both for you and the company (when those rules went into effect about 15 years ago, the company I worked for converted me from an independent to a temp employee, just to avoid the paperwork hassles.)
Welcome to the contractor world. If you're at MS, they will make you take a couple of months away every year, to make sure you don't come anywhere near being classified as an employee. This is one of the reasons to work with an agency, 'cause they'll help you find alternate positions (they don't get paid if you don't get paid.)