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Callao, Missouri | I'd keep the agreement you have now. Here's the deal, no matter how much you think you 'make', an employer is keeping track of the total dollars the employee costs them. Whether you write the check for taxes or he pays half, it doesn't matter because it's still about total expense incurred to the business. The way you have it now you get to use your tax dollars most of the year, as an W-2 employee you don't get to see those dollars until refund time. As a 1099 guy, you can deduct things related to your business- like vehicle, fuel, tools, etc. Not the case if W-2. The guy paying you doesn't have to deal with payroll taxes/deposits, which is a huge, reoccuring pain in the rear. Time spent taking care of that stuff for one employee cuts into the money and time that both of you could be enjoying.
Now, there are two problems that I see with this. #1, its not the way the IRS wants it done. #2, Insurance for you if you are hurt on the job (Workmens Comp). As a contractor, he probably does not have coverage for this. But employers with under a certain number of employees are not required to carry workers comp here (Missouri) anyway, so you still may not be covered.
To me this is one of the things that is wrong with how we run America. If I didn't have to fool with the paperwork hassle of being a boss I would hire more people, especially seasonally. I bet I'm not the only small business that feels that way. Politicians give a lot of lip service to helping the middle/working class and small business. Every time I hear some of that chatter I can't help but think 'just shut up, get out of our way, and let us WORK'!
Edited by NEMOScott 11/30/2011 20:32
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Employee Compensation
