Just a thought; if you're already collecting on your social security and your only income is from 1099 wages, I believe any additional wages you earn will never increase the amount of social security you receive. If that's the case and your client is willing, forming a private corp and taking your earnings as business profits rather than wages will save you the 15.3%. All that could change based on state and local tax laws. YMMV so check with a tax pro.
Not quite. Social security is paid based on your highest 35 years of employement. If you are retired and workking, and you earn enough to change the calculation, the will recalculate your benefit amount. They then pay the increase retroactive to January the year after you earned the money.
So you pay your taxes in April 2016, but were receiving social security checks for Jan, Feb, March and April before you paid your taxes. Since social security underpaid you in 2016 (since they did not yet know your 2015 earnings, you will get a small bonus check.
Also, forming a private corp, and taking your earnings all as business profits instead of wages is very illegal, on a federal level, and I can't imagine it being legal on a state level. Depending on what you do, some of your money can be marked as a return on investment (I'm thinking S corp), which does not pay OASDI taxes. (OASDI is just short for social security)
Example. I work as an accountant for a small business that am one of the owners. We could pay an accountant 20.00 an hour to do my job. Since I do it myself, I clock in (for tax purposes.). If I work 20 hours, I should be paid 400 dollars, but since I own the company and get a share of the profits, I get 600 dollars. 400 is reported as wages, 200 is reported as a return on investment, to avoid OASDI taxes. This is legal, but the problem is you don't want to underpay yourself. If I tried to claim that an accountant would work for 10.00 an hour, I could get in trouble with the IRS. All this is done on my taxes, the company doesn't need to know or care how you do this math, but generally you should have an investment with the company to do this. If you were hired for a job as a 1099, without some sort of investment yourself, and they pay is 15.00 an hour, one would assume the market rate for that position is 15.00 an hour. You can't claim its 10.00 and put 5.00 an hour to a return on investment,
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