Doing 600K Independent Verse 600K at Wirehouse
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I had a client (dentist) that had two other dentists come in for six weeks to run her office while she was on maternity leave. She got nailed in an unemployment audit, even though she (1) gave no direction to the other dentists and (2) the other dentists routinely covered leave for many dentists. Didn't matter. The auditor told us that if someone (1) works in your office (2) doing something in your line of business (3) even on a temporary part-time basis, they are a statutory employee. As I said before, a lot of this is driven by state unemployment funds being in bad shape right now. They are very aggressive in seeking out revenue. No way would I take a chance on giving an assistant a 1099. I even put my cleaning people on a W-2 (and yes, I've seen businesses nailed for that also).Actually, you can 1099 an assistant depending on the hours they work and whether or not they work at the office all of the time.
For instance, you could use three part-time assistants and 1099 them.
What exactly are the tax benefits of being indy or RIA? I can write most things off as a wirehouse advisor, and the other things I’d anticipate writing off as an Indy are things I currently don’t pay for. I’m not doubting there are tax advantages, I just can’t think of them.
The things you write off as a wirehouse advisor can only be written off subject to the 2% floor. So its not that there aer additional writeoffs, it’s that you have to meet the floor as a W2 employee before writing them off.
In addition to that, many indies get "creative" with what they write off. Also, many employ their spouses, and other family members, own their office space, etc. But yes, many of the things they write off you don't "pay for" (except through a lower payout).The writeoff’s are tremendous. As a W2 employee you have a limit on what you can write off in total. As a business owner you don’t. Most small business owners try to show as little income as possible.
I miss mlgone, he was a genius
Hey
I have our crack in house research. top that.
mer,aig and leh were all strong buys. we find value
PLUS, we downgraded FNM and fre and 3 and 1 5/8 .
we add REAL value. and PRESERVE capital
I can top that. We just started coverage of Apple with a BUY. Hey, better late than never!
Shania, in a word, yes, although not nearly as much as you will get with a wire. It used to be that 5% upfront was pretty good, then it got completely silly a couple of years back. I think Jackson’s B/D was paying something around 40% of trailing 12. Those days, to my knowledge, are gone, but 5-10%, upfront, depending on your trailing 12 (more for bigger producers) is probably realistic. My disclaimer is that it’s been awhile since I shopped deals, so I may not be as close as I think. You don’t go indy for the check anyway (I’m sure you already knew that), but a nice check is just icing on the cake.
Do you give her a 1099? or do you pay her taxes(well the employer part?)[/quote] I pay her taxes. I don't know how you could argue with a straight face in tax court that an assistant is an independent contractor (the standard my tax law professor used for when it is ok to try to get away with something). She was making $12 a few months ago, but (1) right now I really need her, which she knows, and (2) somebody else was trying to take her. I asked her what she wanted to stay, and she said $14. I told her that worked for me. I'm sure she wishes she had said $15 or $16, as right now I would probably pay it.[quote=EDJ4now]My asst is $14/hour, no benefits. Find one with a spouse who gets family health insurance. She doesn’t care about the insurance, and it saves me $500-1000/month. She has 10 years experience, but I also live in a relatively low rent/low income part of the country.
I got a round number between 5 and 10% paid in cash, and the 10% loan. Mine is interest free for 6 months, then prime plus I think 1% payable over the next 18 months. The upfront money will buy some tech and furniture, but by the time you get an office setup you probably aren't going to put much if anything in your pocket. Still, it was all money I was expecting to have to pay out of my checking account, so I won't complain. I would have done everything exactly the same even if it wasn't there.[quote=Shania Twain] do you get anything up front indy?[/quote]
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I got 10% trailing 12 upfront forgivable and 10% upfront paid back in the first 12 months at prime plus.