LLCs for individuals - my employer requests to be paid me pay cheque taxes instead of him! Any direction - pros/cons?
Answers:
Your request for information is not related to LLC for individuals.
Employer desires you to salary taxes instead of him mode that employer requirements you to work as a contractor (or on a contract job) and he does not want to preserve you as a regular member of staff.
As a contractor you will wind up up paying 7.65% more taxes. This also save the employer of paying you other benefits that are given to the regular personnel.
The IRS will hold a say aloud surrounded by whether you are a "independent contractor". If the employer controls the work hours, workplace, and how you do the work, afterwards you aren't.
When your employer wishes you to recompense payroll taxes, next you're no longer an member of staff. You are call a consultant. As a consultant, you're responsible for your own payroll taxes including the employer portion. As an member of staff, your federal payroll taxes is 7.65% for FICA and Medicare. As a consultant, your payroll taxes is 15.3%. However, this tax is base on web income after your business expenses such as receiver, organization supplies, gas, motor depreciation, etc. As a consultant, you don't own a set working diary. Your employer can't constraint that you show up at a faultless hour or give notice at a definite hour. But your employer can request that you be within around a particular hour and can be specific on consultation diary. You should check near your accountant on some secondary issues pertaining specifically to your situation. As a consultant, it is pious to hold a LLC. It boundaries the your liability exposure. Your personal assets are better protected. You may want to hold business insurance depending on your industry. If you want to discuss more on this issue, consistency free to email me.
Since you are an hand, in attendance is no remedy. Your employer MUST withhold taxes from your wages and MUST recompense his payroll taxes. Therefore it is NOT a grill of pro and con. The statute is the regulation and that's that!
Your employer is not obligated to withhold your taxes. You are. It's a convience they provide their organization.
May or may not be lawful - nearby are rules, employer can't newly want any and adjectives force are very soon independent contractors. Assuming it's OK, your expenses will dance up, so you should be remunerated more for same work.
If the IC setup is proper, after a corp may be a better choice than an LLC, depending on numerous factor - consult your biz attorney and accountant.