Going into the oil fields. 1099 or w2?

I would have said 40%.

 

Also remember unless you have them pay a c corporation that then pays you W2 then you won’t have any social security paid into your retirement.

I’ve seen stories of many people who thought they could cheat on the taxes going 1099 then find out come retirement time they are getting only the minimum and have nothing saved. Or if hurt and going for disability find out they get half as much through SSI because they don’t qualify for SSD

Unless you save the majority of your income (which most don’t) you are just screwing yourself in the end

Better off just to take it on the nose and work W2 and pay the taxes instead of trying to cheat the system for a few extra dollars

 

Oil Field, 1099 if the rate is good. Otherwise you can't itemize meals and and other expenses associated with living on the road. If W-2, then they need to offer a per-diem plan. If W-2 guys don't get a per-diem plan, they get screwed royally in taxes if they spend most of their days away from "home" since they can no longer deduct daily meal allowance and hotels and other employee expenses associated with being away from home regularly.

 

This.

Also about the 1099 is illegal thing that people say on this website over and over again, yes it is technically. So is jaywalking. The IRS never questions it and probably couldn't care less.

 

Until they do.

 

Most of those guys in the oilfield just work as many hours as they care to or can legally work. They are "self-motivated" to work because they're there in the middle of hell with nothing else to do. They don't work the hours they do because they are coerced or forced to work them. So I don't see how most of these guys could not pass a test to qualify their "contractor status"

 

They don’t care until you don’t pay your taxes. Lol. And that’s what gets some 1099’ers in trouble. They don’t put anything away for April. If it were me and I was making oil field money I would probably pay quarterlies instead of writing one big check at tax time.

 

Actually you're supposed to pay quarterly, no matter if expected annual federal tax would exceed $1,000. They sometimes enforce this (and penalize) and sometimes don't


From IRS ...
Who Must Pay Estimated Tax
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.

Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.

You may have to pay estimated tax for the current year if your tax was more than zero in the prior year. See the worksheet in Form 1040-ES, Estimated Tax for Individuals (PDF), or Form 1120-W, Estimated Tax for Corporations (PDF), for more details on who must pay estimated tax.

Who Does Not Have To Pay Estimated Tax
If you receive salaries and wages, you can avoid having to pay estimated tax by asking your employer to withhold more tax from your earnings. To do this, file a new Form W-4 (PDF) with your employer. There is a special line on Form W-4 for you to enter the additional amount you want your employer to withhold.

You don’t have to pay estimated tax for the current year if you meet all three of the following conditions.

• You had no tax liability for the prior year
• You were a U.S. citizen or resident for the whole year
• Your prior tax year covered a 12-month period

You had no tax liability for the prior year if your total tax was zero or you didn’t have to file an income tax return. For additional information on how to figure your estimated tax, refer to Publication 505, Tax Withholding and Estimated Tax.