Consultancy Question

[Muhammad Bilal]

This question is for all of the gurus that have been working as consultants over the years.

My question is, what do you do to cover your transperancy as far as taxes to the government? Likewise, how do you handle social security, office overhead if any, or any other law issues in your consultancy.

The reason I ask is not because I am going to be a consultant, however I may become a representative for a company and seemed to fall into the same category as someone who may be doing any consultancy?

I would like to hear about this seeming as though I've never been self employed.

Any suggestions, links, helpful hints would be appreciated!

Thanks

[phlipant]

the vast bulk of consultants work for consulting companies as regular employees and therefore draw a normal paycheck with benefits.

if you are an independent consultant, you need to save all receipts and provide them to an accountant each quarter. my accountant will file quarterly reports to the state and federal government as well as social security. in return for this servive, she charges me US$500.

you will have to find your own health care insurance and make your own contributions to your pension plan.

P.S and don`t forget to incorperate, if you do the tax rates are much better.

[hard candy]

and don`t forget to incorperate, if you do the tax rates are much better.
And always use the corporation to sign contracts, if something bad happens and the customer wants to litigate, the corporation will bear any responsibilities
for judgements instead of you as an individual.

[GigaShadow]

Nevada corporations are among the best as they have sucessfully countered every government attempt at probing corporate owners for years....delaware, wyoming and florida have rolled to the fed. Initial cost can be as low as around $250 with a small annual fee to maintain the firm. Two important issues....1) S or C corporation? (I favour C as I am not comfortable with the S corp funds pass through) and 2) an accountant well versed in Nevada corporations.


G :D

[moojuece]

i do some consulting/systems admin work in my spare time and my clients just pay me and send me a 1099 tax form at the end of the year, it makes filing my taxes a bit more work but it keeps my but covered. also i make sure to save reciepts for EVERY technology purchase, as well as purchases that are in anyway business related. the tax deductions for business expenses are about the only thing that kepts me from having to pay in this year. i believe if you do more that $600 worth of work in a year for someone they have to fill out a 1099 for their taxes and then you will need them to give you one as well for your taxes. could be a little off on this but this is my experience