The World of Contractor Work, All-Inclusive W2

[CommsNBombs]

I find myself in General Chat more and more everyday it seems, reaching out to anyone who might know the nuances of Contractor work.

 

The wife is transitioning out of Active Duty to the Nat'l Guard - with our kid due in December, and both of us on AD, that isn't conducive to raising a kid and we REFUSE to have some two-bit douchenugget babysitter or some asshat family member watch and raise them in our stead...anyway, I digress (sorry, it's been a bad week).

 

Anyways - she applied to be a Microsoft troubleshooter/field technician for some Company. Turns out it is a contract, the Company hired a firm to handle it, and from what I have researched it definitely seems like a Contractor position.

 

The job is in Nasvhille, and we live in Clarksville so there will be the obvious 100 mile/day commute, and they offered her an All-Inclusive $44/hr on W2. Not that we really expected them to pick up the tab on that - but she drives an EcoBoost Focus which gets around 38MPG highway so there is that...

 

What I am trying to figure out, is I know the Company itself takes care of some of the taxes but...

1) Is that $44/hr AFTER all is said and done? I don't want that $44/hr turning into $7/hr after all the deductions are made

2) Is there any tax we are responsible for paying on that? I'm going to assume Medicare and SS

 

Has anyone here worked on an All-Inclusive W2 before? How does it stack up versus full-time employment?

 

Granted, I am sure once she gets the whole contract agreement we will know more about hours and everything - but I mean the general vibe.

 

The contractors I worked with in the Army thus far have been some of the smartest people I've met but they always keep that knowledge to themselves and they've all been REALLY lazy and never do something when it is supposed to be done - then they freak out if you somehow fix the issue before they get there. 

 

Obviously companies differ, but any insight will help because Google is not being helpful today!

 

Thanks in Advance.

[LagerHead]

I find myself in General Chat more and more everyday it seems, reaching out to anyone who might know the nuances of Contractor work.

 

The wife is transitioning out of Active Duty to the Nat'l Guard - with our kid due in December, and both of us on AD, that isn't conducive to raising a kid and we REFUSE to have some two-bit douchenugget babysitter or some asshat family member watch and raise them in our stead...anyway, I digress (sorry, it's been a bad week).

 

Anyways - she applied to be a Microsoft troubleshooter/field technician for some Company. Turns out it is a contract, the Company hired a firm to handle it, and from what I have researched it definitely seems like a Contractor position.

 

The job is in Nasvhille, and we live in Clarksville so there will be the obvious 100 mile/day commute, and they offered her an All-Inclusive $44/hr on W2. Not that we really expected them to pick up the tab on that - but she drives an EcoBoost Focus which gets around 38MPG highway so there is that...

 

What I am trying to figure out, is I know the Company itself takes care of some of the taxes but...

1) Is that $44/hr AFTER all is said and done? I don't want that $44/hr turning into $7/hr after all the deductions are made

2) Is there any tax we are responsible for paying on that? I'm going to assume Medicare and SS

 

Has anyone here worked on an All-Inclusive W2 before? How does it stack up versus full-time employment?

 

Granted, I am sure once she gets the whole contract agreement we will know more about hours and everything - but I mean the general vibe.

 

The contractors I worked with in the Army thus far have been some of the smartest people I've met but they always keep that knowledge to themselves and they've all been REALLY lazy and never do something when it is supposed to be done - then they freak out if you somehow fix the issue before they get there. 

 

Obviously companies differ, but any insight will help because Google is not being helpful today!

 

Thanks in Advance.

 

What is the company that offered her the job? In most IT contractor positions you are considered an employee of the contracting company so you are paid just as a normal employee. You can also do 1099 work, which basically means they pay you the entire amount (possibly minus SS/medicare deductions?) and you are responsible for paying your income taxes at the end of the year. My guess is it's the former from your description, in which case you are overcomplicating things. I have worked two contracts and they both worked in the manner of the former, where I was an employee. It's really not uncommon at all in the IT world.

[TNWNGR]

http://money.stackexchange.com/questions/6056/is-working-on-a-w2-basis-with-benefits-paid-to-me-a-good-idea

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[CommsNBombs]

It is an offer from some consulting firm through Dice, hiring out for Caterpillar.

All that was offered was a $44/hr on a W2, all-inclusive but with corporate benefits like healthcare, dental, stock options, etc

Obviously she'll opt out of the health care and vision as she will still be under my TriCare and in the Nat'l Guard.

What I am specifically wondering is that $44/hr what she is ACTUALLY get paid? Or are there more deductions on it.

From what I researched she will only be responsible for paying on 6.75% of that for Medicare and FICA.

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[Dolomite_supafly]

If they are paying taxes that is great but if they are not then expect to loose 1/2-1/3 of the $44 by the time you pay your taxes, insurance and all the other "mandatory" government withholdings.

 

If you want to talk about overseas contracts feel free to contact me. And honestly going overseas as a contractor might be a better option, especially coming out of active duty. Now is the time to get things going before you get out. It takes 3-6 months to get the first overseas contract from the time the company says they want you because of clearances and IDs. And no, your current clearances have ZERO bearing on any future contracts. Your current clearances are with the DoD and you will get vetted by the agency issuing the clearance. And it depends on the government agency what they are looking for. I have known of people who have been in jail get contracts while others were refused a contract because they were too far in debt. BTW, grab an SF 86 fill it out and use it as a master copy for when you fill them out for other clearances.

 

Doing overseas contracts allowed my wife to stay home with our child. And with the rotations you will get more time home than you could ever fathom. I worked, on average, 6 months out of the year and lived it up the other 6 when I was home.

 

And although it is dangerous it is no where near as dangerous as being an active duty soldier.

 

Not sure what skills you have but if you are trained in medical or communications you could command a premium.

 

I will say that the pay is not what it used to be and the competition is a little tougher now than 10 years ago but for the person with the right training you can easily get a job making a good wage. I know people who bought, and paid for, their house inside of three years. I also know people who blew every red cent they made. But how much you make is up to how much time you want to be gone. I know of one guy who would only do one trip a year that would cover Thanksgiving, Christmas and New Years because of the bonuses working during the holidays. If you time it right you can make between $30K and $45K in two months time during the holidays.

 

And if you, or anyone, is considering an overseas position only go with companies that are established and that you sign a contract with. NEVER go over on someone's word, you might end up dead or left in a hostile country trying to find your own way home. I have known a few people who went over with a fly by night company and were basically abandoned after the government paid the company. One guy turned over his passport to the country lead then the country lead flew back to the states with everyone's passports and fell off the face of the earth. My friend had to cross from Iraq into Jordan then go to a consulate to get back to the states and after all that he never received a single dime. One of the biggest indicators as to whether the company is reputable is to ask if you get paid during the training or if they are flying you to training. If they will then it is probably a decent company. If they want you to pay for flights, training and lodging then stay away from them as they likely either do not have a contract yet or they are just interested in making a bunch of money then splitting without paying you.

 

All the times I was paid on a 1099 the "employer" never took out taxes or anything and that was three separate companies over the course of several years. I was left hiring a CPA to go through all of my 1099's to figure out what was owed and what was exempt.

 

And finally, EVERYTHING is negotiable not just pay. I was on a contract when the company needed people to extend 2-3 weeks to cover a transition period. One guy said he didn't want any money but what he did want is some sort of rare 60's-70's drum set. I just laughed until a few weeks later when the company delivered on their promise to find him the drum set they promised.

[btq96r]

Never heard or had "all inclusive W2" as I did 1099 work both in the US and OCONUS.  I can talk you and the wife through some of the deductions if she ends up on 1099.  Living in the states, it's quite a bit you can deduct if you document it right.

 

I can also put you in touch with a bomb ass accounting firm that charges very, very reasonable fees for things like this.  It's not H&R Block cheap, but for the professional services they provide, they're as low as I've ever seen.

 

 

And no, your current clearances have ZERO bearing on any future contracts. Your current clearances are with the DoD and you will get vetted by the agency issuing the clearance. And it depends on the government agency what they are looking for. I have known of people who have been in jail get contracts while others were refused a contract because they were too far in debt. BTW, grab an SF 86 fill it out and use it as a master copy for when you fill them out for other clearances.

 

When I left active duty and took a contract job I had no issue with my security clearance transferring over once my unit "released" me in JPAS so the FSO for the new company could "pick me up."  There was literally no gap as I started the contract job the day after my ETS date, and it was a DARPA contract I was brought onto, so maybe that had something to do with it, but what I've noticed as as long as it's a DoD contract, a DoD clearance can transfer if enough time hasn't lapsed.

 

Now, State Department contracts like WPS/WPPS, or a Department of Energy clearance are a whole different story and usually end up in frustration for the applicant.

 

 

And finally, EVERYTHING is negotiable not just pay. I was on a contract when the company needed people to extend 2-3 weeks to cover a transition period. One guy said he didn't want any money but what he did want is some sort of rare 60's-70's drum set. I just laughed until a few weeks later when the company delivered on their promise to find him the drum set they promised.

 

We had a systems engineer in Iraq who asked to have his contract stipulate that instead of the standard 3 weeks every six months his leave schedule would be a 5-day break every month so he could fly to Thailand, have a 4-day weekend, then come back to work.  I'll leave it to the imagination why he wanted to go there with such frequency.

 

He didn't get it, but he was dead serious when asking for it it.

Edited August 12, 2015 by btq96r

[LagerHead]

And finally, EVERYTHING is negotiable not just pay. I was on a contract when the company needed people to extend 2-3 weeks to cover a transition period. One guy said he didn't want any money but what he did want is some sort of rare 60's-70's drum set. I just laughed until a few weeks later when the company delivered on their promise to find him the drum set they promised.

 

I would probably do some work for a brand new Gretcsh USA Custom set.

 

[CommsNBombs]

I still got 3 years before I ETS. Obviously with a kid on the way the wife is staying CONUS and staying on the network/commo field suppprt side of the house and not tactical/combat radio systems.

Not sure if this one needs a clearance, but she'll still rock it for another 3 years unless they suspend it when you join the Guard for some reason.

She had been pummeling the recruiter with questions so far, just trying to figure out what we are on the hook for as far as taxation goes. 88K/yr to unfuck SharePoint users looks good on paper as a gross income, but if taxes are gonna rape us she will decide on the GS11



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[oldmustangjunkie]

Employees fill out a W4, receive a W2 at year end and have taxes and SS/MC deducted from their gross pay.

Contractors fill out a W9, receive a 1099 and are responsible for their taxes, SS/MC at year/quarter end.

It may be that the job is not permanent and they are labeling it as a contractor for that reason.

[CommsNBombs]

I believe theyre just labeling it as contract work.

He said that deductions would be made and she would get the remainder of the $44/hr...my math came out to it being a net of $38.6/hr which isnt too bad.

The 401K option is 3% but apparently is voluntary, either way we'll start a Roth IRA after paying off the little remaining debt we have and closing on our house.

Thanks for all the input and insight guys!

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[rmiddle]

The job is in Nasvhille, and we live in Clarksville so there will be the obvious 100 mile/day commute, and they offered her an All-Inclusive $44/hr on W2. Not that we really expected them to pick up the tab on that - but she drives an EcoBoost Focus which gets around 38MPG highway so there is that...

 

What I am trying to figure out, is I know the Company itself takes care of some of the taxes but...

1) Is that $44/hr AFTER all is said and done? I don't want that $44/hr turning into $7/hr after all the deductions are made

2) Is there any tax we are responsible for paying on that? I'm going to assume Medicare and SS

 

Thanks in Advance.

 

If they are paying her using a W2 then she isn't a contractor but an employee.  Her job might be to do contract work but she is an employee of the company she is getting the W2 from.  As an employee they will pay half the SS money and they will take out needed taxes and just like any other job there will likely be Vacation days and medical care options.

 

Contract employee's are generally paid under a 1099 they take nothing out and you have to pay all SS and medicare.  That is a very important detail and will make a big difference in cost.  Generally speaking you should assume you will make about 2/3rd of what they will pay you.  So if they are offering you $44 an hour as a contractor I would assume it would be about the same as someone making $30 an hour as an employee.

 

Thanks

Robert