penguinsix

Liability is the big issue I didn't really go into.

When you have an LLC, if someone wants to sue you for negligence, faulty workmanship, sexual harassment, whatever--the entity that they sue is the corporation. My Company, LLC. They do not sue you--Mr. Guy.

This is huge. I mean, mega-huge. If your LLC just has some small assets in it, like a computer, a desk, a car, etc, then a potential lawsuit can only go against the assets of the LLC (minimal).

If it is just you, then they can go after YOUR car and YOUR house and YOUR cash to satsify a debt.

Don't underestimate the liability issue, especially in suit happy USA. You could have a job selling stuff on Ebay and one of the items you sell ends up hurting some person when they tried to use it and that results in a lawsuit against you.

Elvira

The biggest drawback I have found is the amount of tax I pay. I'm being taxed at my husband's highest rate, I do not get any personal allowance, plus I have to pay the full Medicare premiums.

Altogether it adds up to 52%...

I also found the deductions for use of home as office and car deductions less generous than in the UK.

And then there is this whole liability/fear of being sued issue. I have not done anything about this as yet, but it is a worry.

veryfunny

Do you mind telling me what state your business is in?

Giantaxe

Well, you could always file separately, although if there is a big discrepancy between the two incomes it's unlikely to be beneficial. And of course you'll still get stung with that 15+% self employment tax.

Elvira

Nuts+Flakes-Land...

Yorkieabroad

I agree, but I've heard a few companies doing it around here, presumably as a cost cutting measure? BIL's company a couple of years ago tried some cost cutting - they started by cutting out the free soda / donuts / Ice cream in the staff rest area....and cut more costs than they'd expected because there were a few people left citing that as their reason!!

We're self employed (wife does the real work, I do the accounts and crap in the evening) and the medical isn't really a major factor...its just something else to work into the equation. For our situation, the 4 or 500 bucks a month for medical is far outweighed by the difference in self-employed contract rates vs salary.

The main thing I would recomend is getting hold of decent professionals to make sure that you transition into the different regulatory environment efficiently - don't get off on the wrong foot by making your quarterly IRS returns but forgetting to make the deposits or whatever (which is what I did We're small, 2 employees (self and wife) plus however many contractors we need for the job on hand and I thought I'd save a few bucks by handling the payroll myself. Mistake. )

veryfunny

snowbunny

Ya know, as corny as it may be, it's the little things like free soda that make people think that they have a better workplace.

As for self-employment, well -- if it's only you, then there can be issues with you having to work many many hours year round because there's no one to take your place. This depends heavily on what sort of business you take on. Most people I know who are or have been self-employed say that they worked longer and harder at self-employment than whilst employed by someone else. Whether or not they were happier was variable.

Dan725

Grass is always greener, I think. I'm self employed at the minute.......and wanting to go back to a big corporation. I see a lot of corporation people on here are wanting to go the other way. From what I can gather, a lot of people in the US in a professional position which allows for some kind of independent contractor or consulting work go through this dilemma a bit, often flip flopping back and forth.

In answer to your three questions (at the present time - ask me again in a couple of years once I get back to the corporate world.....):

1. I think I am more stressed. My work is on/off - Extremely big paying, intense jobs followed by no work for a month or three.....could potentially be more. On balance, I'm earning the same as I probably would in a corp job for a year, and I get TONS more time off - but time off is spent fretting where the next contract is coming from.

2. I'm pleased I am trying it - you'll never know otherwise.

3. Never did it in the UK so can't comment. The biggie worry will be the medical insurance side - I'm fortunate in that my wife works for a big corporation so we sidestep the medical issues with her insurance.

veryfunny

It seem to me that you rather do that for now though, plus the first few years of a new business is usually the most difficult.

Thanks.

Maz

I toyed with the idea of leaving my corporate comfort zone for a while, but my pay was good. Far more importantly than that, I don't think I could have afforded the $1,000 in healthcare premiums if I'd left.

I really did rather want to branch out on my own and just consult around the Chicago area, but the healthcare cost quickly hit that idea on the head.

veryfunny

I guess it's just is not for you but thanks for your comments.

veryfunny

Eventually bit the bullet and created my own company, so far it has been great.

BritGuyTN

Good job!!

TimNiceBut

IMHO this is the single most important point made about incorporating vs simply being self-employed. Let's just say I found out the (very) hard way that being personally liable for everything if your business goes belly up for whatever reason.