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I have a single member entity LLC set up and I am the only owner/member/employee of this company. I work at client place, i.e Client pay hourly rate to one other company, that company pay to my company and I get salary from my own company.

Questions:

  1. Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not.

  2. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card?

  3. If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax?

Thanks in advance.

  • What does your tax accountant say? – Todd Jun 23 '14 at 16:51
  • Tax accountant said, I can work on 1099 and can use company's debit/credit card to pay my expenses. But since I am going to work at client place and not at my own company office, I am not sure about this. – Deecee2000 Jun 23 '14 at 17:11
  • @user17656 then you should ask "My accountant says X - is he right?" – littleadv Jun 23 '14 at 18:44
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Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not.

If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea.

For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card?

It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it).

If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax?

Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details.

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