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1099 pay

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As far as mileage, you can either take the standard mileage deduction, or keep detailed records on costs of insurance, gas, payments, etc. It's very difficult, especially when you use your car for personal use. The mileage is the best way to go. G-200 is right though, advice from FI will not help much in an audit.
 
I know some guys who do this. As far as I can tell (and I'm no expert) there really aren't any tax advantages. When you're an employee, you pay 7.5% SS tax, and you're employer pays the other 7.5%. When you're under a 1099, you pay the entire 15%. When you're both the employer AND employee, such as when you create your own LLC, you ALSO pay both. Now, you can "delay" some compensation and thus reduce your tax liabilities, but in the end, you have to pay the tax.

The real difference is the liability. Say you crash a plane, I think you're a bit more insulated from lawsuits since you're an employee, and not a contactor. Again I am no expert, just my two cents.

An LLC does not offer any additional liability protection in a court of law than if you were operating outside of one. What protects you is INSURANCE and a really good lawyer.
 
An LLC does not offer any additional liability protection in a court of law than if you were operating outside of one. What protects you is INSURANCE and a really good lawyer.

I sit corrected.
 
My 2 cents. If you work for ONE company as a contractor, you probably won't be able to claim mileage. That is considered commuting to work. An LLC is not worth the time for a single pilot contractor. Your profile doesn't say where you are from, but a knowledgeable (sp) aviation tax guy is worth the money, and is deductable next tax year. AND, if you get audited, he has to be there with you.

It sounds like you are negotiating with a single source company. BIG DEAL is who is paying for initial/recurrent training! If you have to pay for training, get a guarantee from the company for at least the training costs. It sucks to think that you work for your first 3 months to pay for training, but that's what it amounts to.

Make sure you get paid for standby days even if you don't fly. If they expect you to be available then you should get paid. You will meet other contractors and get leads for jobs and if some one calls and you are obligated to your primary company, you should get paid.

When you are negotiating pay, REMEMBER, you are paying all the taxes. When I did it it worked out to around 40% to Uncle Sam, 14% SS, 28% tax bracket. It cuts your daily rate in half.

Buy a unbrella insurance policy. I carry 1 million with USAA for around $400/year. It might protect your house.

Good luck.
 

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