Corp to corp Vs W2 and 1099
US tax terms and how it works Corp to corp or 1099 and w-2 all , You might have heard candidates asking w-2 with benefits and without benefits okay so prior to that we got to understand the piece of status what generally we work with not going in details it’s h1B and green cards green card holders US citizens and OPT and other visa holders and immigrant and non-immigrant alright so someone who needs a sponsorship to work in the US and someone who doesn’t need any sponsorship ,it in that way so for Corp to corp or anyone who needs a sponsorship and who needs employer to stay in the u.s. in to work they work on Corp to corp or the person who was incorporated.
What is actually Corp to corp.
One who first who needs an employer to stay in the US that’s h1b Visa is immigration who goes from India or from other country and they have the employers there they hold their visa and they work on Corp to corp basis .the employer places the candidate to a client on corp to corp basis and they get billed from the client and they pay the candidate is given by the Employer who holds him or her visa sponsorship so in precise in Corp to corp the candidate won’t get money directly from the client, But green card holders US citizens and USC who are incorporated who registered LLC’s in their name they can able to work on Corp to corp Client directly .
What is meant by 1099
1099 , 1099 is something directly the candidate receives the money it’s a pay from the client and obviously it has to be a US citizen green card holders or EAD so here the candidate who receives the amount from the client it’s a pre tax there will be no tax on just maybe employment tax a little bit could have been could be deducted but primarily the candidate has to take care of the tax end of the year . most of the companies doesn’t prefer to be an 1099 so they ask the candidate to work on w2 basis , this is the most important that we everyday work , w2 is the green card holders the US citizens are eligible to work on w2 basis . so you might have heard candidate asking a benefits the w2 candidates right so sometimes you send the right confirmation RTR with benefits and without benefits so let us understand what is benefits first so I’m talking about contacting point of view not a permanent position for only for contract positions so most of the companies have . its own benefits to offer to its employees that’s health or health insurance vision dental 401k 401k pension plan and some videos paid time offs few companies offer alright
What is W2 Contract
So when a candidate joins a company on a w2 basis if he or she wants to enroll in the benefits package so that person has to purchase the benefits from the company In W2 it’s not free but because the companies have a corporate plan or group policies the candidate will get in a lower rate of the premium will be low if the person purchases it from the company so when we say it’s w2 plus benefits so the candidate would like to purchase the benefits from us from that company so how it is going to work is if $100 is the pay rate on w2 basis and candidate wants to opt for benefits let’s say there’s some amount coming on premium for example if Christ he would like to enroll benefits and it comes at $20 okay so how it were $80 sorry hundred dollars and you deduct 20 dollars that would be pre taxed it means there will be no tax on the 20 dollars and 80 dollars that will be taxed and rest of the amount who is going to pay to the candidate so whenever you are confirming a w2 a rate on w-2 it let’s say it’s hundred dollars on w2 per hour the candidate is not going to get $100 he or she has to pay the taxes and to minimize the taxes they opt for benefits all right which will be pretext understood and if you do not offer any benefits so $100 whatever the candidate earns per hour according to the w2 he will be taxed on it clear so it is very much important for you to understand what are the benefits that your company is offering so that you can able to explain the candidate all right so it’s better to have a company with benefits because in that way you can able to sell yourself properly and you can have more submissions showing these are the benefits that your company is offering.
Thank you. I’ve a question. I’ve a FT job and would like to take a second job on remote, since time permits. I get offers on both W2 as well as C2C.
Some say, opting for C2C is better, since I’ve a FT job (W2) which offers benefits, I won’t need them from another W2 and hence can negotiate a better billing rate on C2C than what W2 offers. Also, according to them, since I’ll be doing remote support, I can reduce the taxable income by deducting business expenses. Since this is remote support option (WFH), I was told that, I can use my computer room as the work space and deduct the “sq. ft times some $ amount” as allowed by the IRS.
Can you explain a bit about any other such deductions please ? I’m trying to weigh which one will give me better net pay.
Also, since for C2C, I need to set up an LLC, I understand I’ll be the sole owner as well as the employee. In such case, how the salary is paid to me, “the employee” ? Will this LLC need to generate a W2 to me, “the employee” as as a salary ? If this is the case, then will I have to pay the taxes twice ? Once for the LLC company and the next for me “the employee” of the LLC per the W2 ?