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 incorporating oneself for c2c contract
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Posted on 12-02-08 12:55 PM     Reply [Subscribe]
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Does anybody know where and how one goes about incorporating oneself?  I have been offered a contract under Corp. to Corp. (C2C) basis.  But I am not incorporated.  I would appreciate it if anybody could shed some light on how I can go about this incorporating business.

Plus, what are the insurance policies I need to buy?

btw, I am in New Jersey.

Thanks.

 


 
Posted on 12-02-08 1:13 PM     Reply [Subscribe]
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google gara na bhai

And in few states you can incorporate online as well. whether you are in NJ or wherever does not matter because no one is coming to you to 'takryauna' your incorporation.

 
Posted on 12-02-08 1:27 PM     Reply [Subscribe]
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Riten,

I do not believe you can incorporate yourself. You can form an entity and incorporate it and offer your services through this entity. The incorporation process is fairly easy and you can do it yourself by filing articles of organization with your State. You can also take help from legal services like www.legalzoom.com if you don’t mind paying a couple of hundred bucks. However you need to decide whether you want to form a LLC, S-Corp, or a C-Corp.

In my opinion you are much better off working on a W2 contract then forming an entity to work Corp to Corp. As far as I understand you have to have a hefty workmen compensation insurance policy in order for you to work through this Corp that you are going to form. Besides, there is a lot of other paper work to keep track of. The other option is to go for the 1099 contract if you want to pay the employment taxes yourself and keep much of the money you have earned. But again this comes with some hassle of paying insurances and keeping track of papers etc.

Hope this helps a bit 


 
Posted on 12-02-08 2:04 PM     Reply [Subscribe]
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Thank you, both, for your suggestions.

Bhasmasur, you mentioned 1099.  Do I register as a sole proprieter and get Federal Employer Identification Number in order to work under 1099?

Thanks.


 
Posted on 12-02-08 2:35 PM     Reply [Subscribe]
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Riten,

No, you do not have to register a business or get an EIN to work under 1099. You will work using your SSN. The only difference working as a W2 contractor vs a 1099 contractor is that you have to pay the employment taxes on your own on the latter which otherwise your employer would have paid.

When you are an employee or a W2 contractor, employers generally withhold taxes on your behalf. Additionally, employers also pay the same amount of taxes to Fed that you pay from your paycheck.  Now since 1099 contractor is considered as self employed not only you will have to pay your taxes but also pay the taxes that employers would have paid to Fed for you.  You need to make these payments quarterly.

So, overall, there is more paperwork and hassle that you need to take care of while working on 1099. However, you will be able to deduct certain qualified expenses while filing taxes as long as you save all the receipts. The expenses may include purchase of a computer for your contract work, money spent on gas etc.

Good Luck 1099ing :-)

 


 
Posted on 12-02-08 3:01 PM     Reply [Subscribe]
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Thanks B.  I guess I will be 1099'ing.

I read somewhere that S corporation or LLC is a good way to go.  But I need to find out more.  However, if 1099 allows me to deduct my work related expenses, then that seems like the most viable method.

Do share your thoughts/information about 1099, if you have more. 


 
Posted on 12-04-08 10:25 AM     Reply [Subscribe]
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Does anybody know about Professional Liability Insurance for Technical Services?  If so, can you recommend a good agent to buy it from?  Thanks.
 


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