Should I do a W-2, 1099 or Corp-to-Corp for a new software consulting job?
If you’re lazy, be a W-2 employee and file the 1040-EZ every year. If you want freedom, be a contractor. If you want to build a business, go “Corp-to-Corp”. Register a Delaware LLC for $100 (or incorporate in your own state) and open a business checking account. Run all your proceeds through the corporate account and build up its credit rating and its Better Business Bureau profile. • When this particular software project ends, you could be an out-of-work consultant. • Or you could be a business owner, with enough credit and demonstrated integrity to get your next business plan funded. But you had specific questions about finance. It’s true that a contractor or a sole proprietor have a higher base tax than a salaried employee. But that employee can’t deduct nearly as many business-related expenses, from cell phone bills to part of your rent. Unless
