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PrayForEveryone
01-15-2009, 11:39 AM
I'm currently working on EAD on a full time (W2) job with my current employer. One of the previous employers have asked me to work for them on 1099 (part time), along with my current full time job.

Is there any issue with doing this without affecting my GC. If yes what would be the best way to handle this. Have anyone of you been in this situation?

FYI... My I-140 is approved and I-485 is pending for more than 180 days...

Thanks for your answer in advance!

cooler
01-15-2009, 12:01 PM
There are no repercussions of working on 1099 using EAD, as long as this is a secondary employment. Your GC will be driven off of the primary empoyment, which seems to be still based on a permanent job and meets the overall employment and pub conditions as laid out in the Labor certification & I-140.

I would suggest that you take it easy and enjoy the extra cash.

One word of caution. using the 1099 means you need to pay 15.2% Self Employment taxes in addition to the income tax on the income, as opposed to the 7.6% that you would have paid for SS & Medicare taxes (in case of w2 employment).

Folks tend to overlook this. on a 10K income, you would have lost

W2 income
-------------
760$ towards SS +MEdicare taxes (approx)
X$ towards federal taxes
y$ towards State taxes


1099 income
-------------
1520$ towards SS +MEdicare taxes (approx)
X$ towards federal taxes
y$ towards State taxes

PrayForEveryone
01-15-2009, 12:16 PM
Thanks for your response!

Is there any other better way than 1099? They are open to other options.

Thanks again!

a_yaja
01-15-2009, 12:45 PM
Thanks for your response!

Is there any other better way than 1099? They are open to other options.

Thanks again!

You can also do what is know as "con-W2". This is the scenario where you will still be paid hourly but all required taxes are withheld by the employer. At the end of the year you will get a second W2 from this employer. You don't have to worry about Social Security, Medicare etc as it would have been withheld already.

One thing to keep in mind though - when your combined wage for 2009 goes beyond $106,500, you have to ask both your employers to stop withholding social security tax. This is because for 2009, only the first $106,500 is taxed for social security. Anything above that - you don't need to pay social security. Medicare on the other hand does not have any income limits.

If Social Security tax is withheld beyond $106,500 - you have to ask one of your employers to refund the tax withheld for amount above the $106,500.

diptam
01-15-2009, 04:24 PM
In W2 the middleman/agency/desi-shop takes $30/hr from my billing. If i can arrange a client 1099 is probably profitable.
Lets talk about 1 week and calculate :

1009 - total earnings $4000 , net earnings 4000 - 4000X37.5% = 2500
W2 - total earnings $2800 , net earnings 2800 - 2800X30% = 1960

So you can make $500+/week more with 1099 after tax ... assuming that you work 44 weeks ( 2 weeks client holidays ,and 6 weeks of yearly vacation) you make $22,000 more in 1099. That's lot of money - invest in Fixed Deposits,Bonds, House,Land,Gold, Stock Markets accordingly and thrive.

There are no repercussions of working on 1099 using EAD, as long as this is a secondary employment. Your GC will be driven off of the primary empoyment, which seems to be still based on a permanent job and meets the overall employment and pub conditions as laid out in the Labor certification & I-140.

I would suggest that you take it easy and enjoy the extra cash.

One word of caution. using the 1099 means you need to pay 15.2% Self Employment taxes in addition to the income tax on the income, as opposed to the 7.6% that you would have paid for SS & Medicare taxes (in case of w2 employment).

Folks tend to overlook this. on a 10K income, you would have lost

W2 income
-------------
760$ towards SS +MEdicare taxes (approx)
X$ towards federal taxes
y$ towards State taxes


1099 income
-------------
1520$ towards SS +MEdicare taxes (approx)
X$ towards federal taxes
y$ towards State taxes

cooler
01-15-2009, 04:41 PM
No offense, but given the same amount, 1099 would result in lesser net earning.
In your example, The Net amount is higher, coz the starting amount is different for 1099 vs, W2. If you can swing the deal you suggested then yes, 1099 would be better.


In W2 the middleman/agency/desi-shop takes $30/hr from my billing. If i can arrange a client 1099 is probably profitable.
Lets talk about 1 week and calculate :

1009 - total earnings $4000 , net earnings 4000 - 4000X37.5% = 2500
W2 - total earnings $2800 , net earnings 2800 - 2800X30% = 1960

So you can make $500+/week more with 1099 after tax ... assuming that you work 44 weeks ( 2 weeks client holidays ,and 6 weeks of yearly vacation) you make $22,000 more in 1099. That's lot of money - invest in Fixed Deposits,Bonds, House,Land,Gold, Stock Markets accordingly and thrive.

diptam
01-15-2009, 04:50 PM
What you said is completely true - i assumed the you can pull larger base amount (20%-30% larger will give you 15k-20k/yr) with 1099 consulting. See the essence of 1099-Consulting is you are working for your own company - so you can do a Corp-2-Corp deal with direct client company or their gate keeper company as opposed to a 2nd company who pays you on W2 and that 2nd company doing C-2-C deals with client company or their gatekeeper company.

Let me give you a example :

In Boston,Veritude is the gatekeeper company of Fidelity , last year they offered me $100/hr for a Job at Fidelity. I couldn't take that Job because my I-140 was not approved - after 2 months an agency came to me and offered the similar Job at Fidelity for $75/hr and i would be working in W2 with that agency. It didn't take me time to understand that $25/hr is going to the agency's pocket.

No offense, but given the same amount, 1099 would result in lesser net earning.
In your example, The Net amount is higher, coz the starting amount is different for 1099 vs, W2. If you can swing the deal you suggested then yes, 1099 would be better.