4 ms·
I just transitioned to contract based. The pay is significantly higher than if I was a salaried employee. In addition all of my salary comes to me, pre tax. Thi
by wonderwonder 6y ago
I just transitioned to contract based. The pay is significantly higher than if I was a salaried employee. In addition all of my salary comes to me, pre tax. This allows me greater flexibility regarding what I do with my $. For example I will use all income in the first half of the year to pay off all of my debt (2 cars, credit cards and money down for a house refinance). The second half of the year I will save for taxes and at that stage my overall monthly bills are massively lower. I get my health insurance via my wife who is salaried. In addition it allows me to write off a lot of things for taxes. Getting paid through my company gives a lot of tax benefits.
The contract is for a year, with the option to extend. The job I just left was salaried but actively laying people off. So while both positions have risk, the contracted one provides a much higher income and flexibility to use it as I see fit. Plus any work I do on the weekend for the contract position is paid, as a salaried employee its not.
- mjcohen 6y agoKey point: "I get my health insurance via my wife who is salaried." What if you had to provide your own health insurance?
- masonic 6y agoFor example I will use all income in the first half of the year to pay off all of my debt In the USA, this is a form of tax evasion, as you are required to pay estimated tax 4 set times a year, based on income during those periods. So, it might be prudent to avoid boasting about same in a public forum.
- rossdavidh 6y agoWhile you certainly should make payments 4x yearly, and I do, the reality is they just penalize you (10%, IIRC). I've never heard of it being prosecuted as "tax evasion". But, unless your interest is >10%, probably actually costing you money compared to making 4x payments per year. IANAL (or accountant).