Originally posted by Raj Ohadi:
Many consulting firms say they can do either W-2 or 1099 with new hires (of course I am talking about USA). I am wondering if I do 1099, do I have to register and set up a S-corp or whatever company first ?
No. You don't need a C-corp, S-corp, LLC, etc., to have a 1099. However, there are some extra tax advantages to do so -- it is easier to deduct certain expenses. Regardless, I suggest you get a good accountant for this.
Furthermore, you will also start off with a disadvantage. For 1099, you will be paying both sides of the FICA, whereas with a W2, you will only be paying your half. Again, you need to consult your accountant about this.
Henry
[ June 07, 2008: Message edited by: Henry Wong ]