If you’re not saving 15, 20 or more cents on the dollar, you’re doing it wrong as a 1099MD!
Here are 5 reasons, among others, to be a 1099 instead of a W2:
1. Deduct a new (or used) SUV purchase (must be 6,000 GVWR or higher) 100% (via bonus depreciation) = 100% tax deduction for 100% business use.
2. Pick your own stuff (medmal, disability, life, health insurance) rather than be locked into someone else’s plan. Use this to your advantage to maximize your protection and sleep well at night.
3. Maximize your tax deductible (above the line) contribution to your own company’s SEP-IRA or equivalent plan. Pay yourself 216k on a w2 and deduct 54k (25%). Naturally, the deduction is tax deductible and grows tax free, so you’ll pay tax on required withdrawals starting at age 70.5. Of course, who knows what tax law or requirements might be years in the future but its tough to beat a deduction and tax free growth.
4. Adjust your benefits, and pay requirements, on demand. You’re in charge, you require nothing more than your own free will to modify your situation as you see fit.
5. Deductions, deductions, deductions. The tax code is rife with opportunity. Most of your tax, legal, accounting, electronic services, computers and other hardware, and so much more are deductible. Master it yourself by reading from great sources or hire an expert who specializes in tax efficiency. Often your accountant is not the best source unless you have a proactive (beginning of year) discussion to identify and capture these opportunities.