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Commission-Only Job: Self-Employed?

 
 
roger
 
  1  
Reply Wed 24 Feb, 2010 02:22 pm
@BorisKitten,
I don't do taxes, but yeah, I'm sure you would have to file a Schedule C just to recapture your own business expenses. The Self Employment tax, your 1/2 of FICA is a deductable expense, and you would have to claim in on Sch C if memory serves. If the standard deduction does better for you than itemization, those expenses are lost, of course.
0 Replies
 
Amigo
 
  2  
Reply Wed 24 Feb, 2010 02:43 pm
Sounds fishy to me. Be carful, I have heard some bad stories and stories about these companies getting you to work for nothing. You pay for everything. Ink, paper, gas, insurance, etc,etc and then all the leads are bullshit and your bills pile up.
0 Replies
 
Green Witch
 
  1  
Reply Wed 24 Feb, 2010 02:55 pm
I pretty much agree with everything that has already been said. I'm not in favor of you of taking it on. Too many unknowns and the negatives outweigh the positives. If you are going to be self-employed you should work for yourself. You would better off cleaning houses, doing interior painting, gardening or helping out elderly people - less aggravation, better flex time, more cash, same benefits (ie: none). Commission sales can be great if you have the right product, or sell to people you like, but this sounds like commission for customer service and no way can that add up to decent money.



0 Replies
 
Setanta
 
  2  
Reply Wed 24 Feb, 2010 03:12 pm
@BorisKitten,
Quote:
. . . after all I'd be paying Medicare & Social Security, would I not, with a 1099?


To be more honest than i probably should, i've always fudged my 1099s when i actually received any, to the extent that i didn't report cash income, and flew in under the minimum tax radar.

But yes, you're share of Social Security would be 12.5%, which, based on the previous image of $20,000/year, would be $2500. Medicare is a further 2.9%, wich $580 more, for a total of 3080 right off the top of $20,000 income.

If you're going to be paying 15.4% on your gross income, i'd say Greenwitch has the best advice--set up your own business with a not unreasonable expectation of making some decent money.

While it is true the the Self-employment tax allows you to deduct 7.65% from your gross income while calculating your adjusted gross income (a tip of the hat to the employers share of SS and Medicare which is not taxable income for employed persons), that reduces the amount you're taxed on, not the amount of your tax.
ehBeth
 
  1  
Reply Wed 24 Feb, 2010 03:16 pm
@BorisKitten,
BorisKitten wrote:
it's better than Wal-Mart.


my question is, how exactly is it better than Wal-Mart or something like Home Depot? sounds like you'd have a fair bit of annoyance and possible expense for little to no guaranteed income. At least at Wal-Mart, you work an hour, they pay you for an hour.
0 Replies
 
TTH
 
  2  
Reply Wed 24 Feb, 2010 03:17 pm
@BorisKitten,
Generally yes to a Schedule C like Roger posted.

If you have a net income subject to Self Employment Tax, then 1/2 of it is deducted on Form 1040, page 1, under Adjusted Gross Income.

0 Replies
 
TTH
 
  2  
Reply Wed 24 Feb, 2010 04:12 pm
@Setanta,
Setanta wrote:
To be more honest than i probably should, i've always fudged my 1099s when i actually received any, to the extent that i didn't report cash income, and flew in under the minimum tax radar.
I think quite a few people do this and that is why the IRS usually tends to audit Schedule C filers.

minor detail but could add up....the SS rate is 12.4%
0 Replies
 
Setanta
 
  1  
Reply Wed 24 Feb, 2010 04:15 pm
Yeah, i knew i was off by 0.1% somewhere, but couldn't get back in time with the edit.
0 Replies
 
BorisKitten
 
  1  
Reply Wed 24 Feb, 2010 07:15 pm
Applauding all my A2K friends and their excellent advice! Thank you again, you good folk.

I went to the interview this evening and discovered (to my surprise) that this fellow is willing, in fact, to pay me hourly, as a regular employee.

YES! I'm good! I'm that good!

Now my job is to come up with a proposal for him: what my working hours would be (I'd like to get rid of that pesky phone by, at latest, 3 PM daily), how much will be base pay and how much will be commission, etc.

He said the only reason he wanted to do a 1099 was because he couldn't be bothered to figure taxes with QuickBooks.

Oh, hon, I think I said, if you can't figure it with QuickBooks, you can't figure it, period.

Heck, I did payroll with all appropriate taxes using Excel's cheapo version for 2 years, back in 2000-2002, and it worked just fine.

What was that called? Oh, MS Works, that was it. Came free with the (ancient) computer. No problems in those 2 years.

I feel much better with this (regular employee) option.

I have to work tomorrow, my very last day on my previous (tutoring) job. In the meantime, I need to come up with a proposal for this guy... sigh.

Minimum wage + commission; commission-only; pay-as-you-go (as in, I bill him for hours, he pays me, I bill him for more hours, etc), or whatever.

I feel in over my head.

Talk to me, friends.

He's flexible. He wants me to run his business, then sell the business in a couple of years. NOW he's talking, I'd be Management.

Doh!
Setanta
 
  1  
Reply Wed 24 Feb, 2010 07:23 pm
@BorisKitten,
Quote:
Oh, hon, I think I said, if you can't figure it with QuickBooks, you can't figure it, period.[/i]

Amen to that--and for QuickBooks Pro, there's a tax table service which will update you tax tables on an annual basis. He's kind of small right now, and it wouldn't really be worth it to subscribe (years ago, it was $180/year), but you can do your payroll, and then modify it yourself.
0 Replies
 
tsarstepan
 
  1  
Reply Wed 24 Feb, 2010 07:29 pm
@BorisKitten,
Are you sure it's a legal company???
tsarstepan
 
  1  
Reply Wed 24 Feb, 2010 07:31 pm
@Setanta,
Setanta wrote:

By the way, if BK him/herself made $100,000 in sales in one year, at the outside, with a 20% commission, that would be $20,000. There are 2080 hours in a standard 52 week, 40 hour/week year. So that would not even amount to $10.00 an hour if one were being paid hourly.

If it looks like bullshit, and it smells like bullshit . . .

This bears megarepeating Boris!!!
Setanta wrote:

By the way, if BK him/herself made $100,000 in sales in one year, at the outside, with a 20% commission, that would be $20,000. There are 2080 hours in a standard 52 week, 40 hour/week year. So that would not even amount to $10.00 an hour if one were being paid hourly.

If it looks like bullshit, and it smells like bullshit . . .

Setanta wrote:

By the way, if BK him/herself made $100,000 in sales in one year, at the outside, with a 20% commission, that would be $20,000. There are 2080 hours in a standard 52 week, 40 hour/week year. So that would not even amount to $10.00 an hour if one were being paid hourly.

If it looks like bullshit, and it smells like bullshit . . .

Setanta wrote:

By the way, if BK him/herself made $100,000 in sales in one year, at the outside, with a 20% commission, that would be $20,000. There are 2080 hours in a standard 52 week, 40 hour/week year. So that would not even amount to $10.00 an hour if one were being paid hourly.

If it looks like bullshit, and it smells like bullshit . . .

0 Replies
 
BorisKitten
 
  1  
Reply Wed 24 Feb, 2010 07:32 pm
@BorisKitten,
Oh, and I brought up these "two possible deal-breakers" during the interview:

One: the 1099. SO much bookkeeping for me, and possibly a net loss once all is said and done.

Two: the hours. "We're at cross-purposes here," I told him. "You want me to answer the phone from 9 AM - 5 PM; I want to work part-time."

He agreed that we are, in fact, at cross-purposes here, with the hours and the tax work. Thus his suggestion that I come up with a proposal that will please us both.

I could work as a regular employee with an hourly rate. Once he sees how good I am, he'd probably be willing to pay me more per hour.

Right now the problem is, what will my proposal be?

I like the idea of the work, honestly. I'd come up with proposals for business owners who wanted websites; I'd figure a profit margin and (hopefully) get a portion of that profit for myself.

I'd serve as the go-between with the programmers and the customers (I'm SO good at that!). I'd invoice the customers at the end of the project.

I'd know that the project would NOT, ever, go as planned, and be prepared to deal with those difficulties.

I'm good at this, I like it, I've done this sort of thing (communications w/programmers and regular folk) during my entire career, and it appeals to me.

I never dreamed I'd be able to find "work in my field" in such a rural area, on a part-time basis. It could work.

It really could. But how?
0 Replies
 
chai2
 
  3  
Reply Wed 24 Feb, 2010 07:40 pm
Every new fact you bring to this discussion makes me more and more convinced you'll get screwed, and not in a good way.

He hasn't "done" anything with the business in a couple of years?

He wants you to "run" the business, and then he wants to sell it (to you I presume) in a couple more years?

You'll be making minimum wage plus commission (which I doubt they'll be any)

He only grosses $100K a year?

He's "working" on a manual?

Run Forrest Run.
BorisKitten
 
  1  
Reply Wed 24 Feb, 2010 07:43 pm
@tsarstepan,
Oh, such a good question! I think so.

He showed me his Income/Expense statements on QuickBooks (his laptop) during the interview (couple of hours ago).

Quick glimpse for me, but I know what QuickBooks looks like and I know what the web addresses are for them. Looked legit to me.

This fellow, oddly, is religious (unlike me), a youth pastor, plus he has a clause in his web-development contract which clearly states that he will NOT develop porn, hate, or "lingerie" websites, period. All customers must sign that.

I never thought of that, old lady that I am, but now that I've seen it, I like it.
tsarstepan
 
  1  
Reply Wed 24 Feb, 2010 07:46 pm
@BorisKitten,
http://www.bbb.org/
The Better Business Bureau!!
Seriously! Look them up!
chai2
 
  1  
Reply Wed 24 Feb, 2010 07:48 pm
holy ****, he's a youth pastor?

worst news yet.
BorisKitten
 
  1  
Reply Wed 24 Feb, 2010 07:52 pm
@chai2,
Actually, he hasn't done anything w/the business in 2 months, since he started full-time with a totally different company. He claims he ran this business for 2 years full-time, before getting this (new) job.

His blog has not been updated in 2 years; you're right about that. All 'de sudden his blog has been updated several times in the last month.

I have his "manual" in hand. Seems legit to me, though more, oh, Sales-y than is my wont.

I value your opinions, Chai.

Would it be worth it to me if I were a regular (W-2) employee?

I could still just pass it up, and continue my pursuit of a bank-teller job, at which I've had some success (2 in-person interviews so far, but no offers, darn it!).

The whole 1099, self-employment thing really turned me off. When I met with him and he was (suddenly) willing to make me a "regular" employee, well, my opinions changed.

Gads, I hate looking for a job! Just throw me off the nearest bridge instead, and I'll be happier, OK?
0 Replies
 
BorisKitten
 
  1  
Reply Wed 24 Feb, 2010 08:00 pm
@tsarstepan,
Such a good idea, you!

Checked their site, and got no results. Er, is that good news?
BorisKitten
 
  1  
Reply Wed 24 Feb, 2010 08:04 pm
@chai2,
chai2 wrote:

holy ****, he's a youth pastor?

worst news yet.

In my opinion, RIGHT! Kinda creepy.

My impressions on meeting him in person were:

Young. Prolly a millionaire by the time he's my age. Salesman. Will bullshit, within limits. Smart. Nice laptop and cellphone. Casual dress. Go-getter. Likes to think he's hip and modern.

My cell phone, when I produced it for him, was so old and outdated that he actually took a photo of it, for entertainment purposes, with HIS cell phone. Kinda funny.
0 Replies
 
 

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