How does income tax work when you're IC?
Posted By: Eric on 2008-03-07
In Reply to:
I was offered a position from a company as an IC, and the contract had a clause about being responsible for your own tax deductions, etc. As I have only ever been an employee, I am not entirely sure how this works. If you are IC how do you pay taxes? Thanks!
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work 2 jobs - see income going down -
as I still do mostly transcription but both are heavily into VR with huge pay cuts and I am so fast at typing that I will lose money big time - FT national 45,000, PT small company 13,000.
74K solid year income + MT work
I saw in the Education Website a 74K package + some MT work that could get you into 90K a year after taxes. Is it worth it?
Poll: What do you consider a good income for MT work currently?
You can answer in your subject line. Talking about gross annual income:
1) $20,000 to $30,000
2) $30,000 to $40,000
3) $40,000 to $45,000
4) $45,000 to $50,000
5) $50,000 and up
6) $60,000 and up
MT work - IC or employee or MTSO, even QA work could be included here.
Not sure, I have deductions for federal income tax, SS tax, Medicare tax, and state income tax. ???
nm
IF it is secondary income, where is the harm? As long as you work around your kids (at night, naps)
a big plus when you are around kids all day and bring in a little cash to help out the household.
Well, you're all complaining that accounts are current and work is low, so, gee, maybe they're
focusing on WORK, as in CLIENT and transcribing, as maybe half of you should be focusing on!!
You're lucky they work for you. I've never gotten a refill to work right, ever.
x
Work for a company in a state that has no state income tax
I think there are 3 or 4 out there (Florida, Texas, and a few others.) Then you really avoid the tax situation.
You're 100% right! And where we work - (sm)
(and what we wear!) should have NO bearing whatsoever on whether or not we're considered 'professionals'.
I think the reason the MT industry has gotten out of the hands of MTs and hospitals, and into the hands of plain old businessmen, is because, since we're a mostly 'invisible' workforce, they could see countless cracks and loopholes they could take advantage of when it came to cheating the workers (and the laws in this country) and making more profit for themselves.
I caught something on TV last night speaking about the "equal value" laws some states have, when it comes to the disparity between men's and women's pay. Certain jobs were awarded point systems to determine their worth to an employer. One example was secretaries (women) vs. the building's heating/AC/etc. maintenance workers (mostly men). They each were worth 100 points. Yet the men made twice what the women did, and worked fewer hours on average.
Considering what MTs are expected to know (especially according to AHDI/AAMT), I wonder what our point-value would be compared to, say - a paralegal, or a paramedic, or an executive secretary, etc. (Probably not the best comparisons, but all I can think of at the moment). The only difference between us and them is where we work. They're on-site & highly visible; we are off-site and totally invisible. (How many of us have ever even met our bosses or supervisors face-to-face? Very few, indeed). But does that make an MT worth less? NO. Only in the eyes of the tunnel-visioned doctors, dictating away and aware only of their own jobs, or the hospital CEOs trying to bolster their own worth to their institutions by cutting transcription costs (many of them don't even quite know what transcription even IS), and worst of all, the owners of large MTSO's, who in large part these days are simply businessmen or women who bought the company because they felt they could turn a huge profit with it by underpaying its workers, and most of whom have never been an MT a single day in their lives.
I think you're all wrong. It's all about getting the work done
for the hospital in the fastest time possible and my company doesn't care if I do it or if you do it (if you worked for us) or if someone else does it, just get it done for the client. So complain as you like, find somewhere else to work if you need, but get the work done. That's the bottom line.
Look at what you're using now as far as ports for work. sm
You'll need to get a laptop that has the same kinds of ports. If you're using all USB, you're in luck because most new computers only have USB. If you're using a serial foot pedal, consider buying an model just off lease that has that port. There has been such a problem where I work because they don't have USB capabilities in their software yet and so their serial foot pedal does not work with newer laptops even with adapters from serial to USB.
I just bought off lease a Dell and made sure it had all the ports I wanted, including a parallel port because that's the foot pedal I have. The laptop was built in 2002, has over 1 gig of RAM, all the updates for Windows XP and it works just fine for me.
I understand what you're going through. I work both myself. sm
I have been IC for several years, and thought I might go back to employee for benefits. But I found the insurance was so high, and the pay was not as good, so I work both part time now. The bottom line is, I can't give up the freedom I've had in the last several years. I am given so much work in the morning, and have all day to finish it, and I love this system. I tried to set a schedule for my part-time employee job, thinking I would like to go to full time if it worked out. But I had too much trouble making myself fit a schedule (they have offered to let me work when I can, so I'm still keeping the job, but if I can't do it right, I will quit). Unfortunately, when you get used to IC, it is hard to fit back in a "box." Maybe you could look for a company that would allow you some flexibility in your schedule, say an 8-hour window to work 6 hours. If you have the experience, some companies will work with you that way. I don't think IC is a dead end, it is just a little harder to manage. But the benefits did not pan out. I can get the insurance cheaper individually, the pay was lower so I could actually put a little back as an IC every pay period and take time off "paid." The only thing I miss is what they pay for taxes (I think 7% or so), and having someone else do these things for me. If you like IC as I do, try setting up your own retirement plan, getting your own insurance, and put a little back each pay period for some time off. Good luck with your decision.
You're RIGHT, & many of us *need* to work at home
:(
You're lucky. I get lots of work but have
You're right! I wouldn't work for a company that SM
expected me to surf all over the world just because some prima donna didn't want to be bothered with proper dictation.
I work for a national, and we're allowed
.
Any program will work if you stick with it and it's NOT what you're doing right now. nm
s
Depends on where you work and how you're paid
kj
It depends on what kind of work you're doing..sm...
If you're doing clinic work, you would need the book that pertains to your clinic. I'd also recommend a Stedman's Abbreviations, acronyms & symbols. I'd also recommend Sander's Pharmaceutical Book. Other than that, I'd use Google and trustworthy websites.
You're right. Unfortunately, in some areas inhouse work is
I keep hoping some sort of changes in U.S. laws may come to the rescue before it's too late, and the whole industry becomes offshore and automated. Because if that happens, there will be less and less reason to want to entrust one's care to an HMO.
True. So then don't work. We're talking CHOICES here. nm
x
No! And boy do I know where you're coming from! I tried to get the Olympus pedal to work, but..
wound up pulling my hair out instead. They don't make it easy on us, do they?!?!? 
If you're so brilliant then, why aren't you in a better line of work?
1. Surgeon.
2. Attorney.
3. College professor.
oh, and yes, my brilliant one - what year exactly did you graduate with your Ph.D. from Harvard?
LMBO
So you use MCI for unlimited LD for work and they're fine with it? About how many minutes do you
use per month, do you think?
You're right about the "prehistoric" part! The place I used to work (sm)
uses Lanier, and it's a mess. It's WORSE than prehistoric. It was down more than it was up. It was also not at all friendly for at-home MTs, either.
They're not thrown to the dogs when they had no work to begin with!
nm
For Pete's sake, if you're too sick to work,
call in sick!!
This past week I've had chronic sinus drainage and a nagging,constant cough that has kept me up most of the night. Felt okay during the day,(although typing speed decreased significantly).Was able to take cat naps off and on during the day to make up for lack of sleep, otherwise,I wouldn't have hesitated to take a day or two off.
If I'm "really" sick,I call in for a sick day without hesitation!!
You're rude. That being said... Some people just work alone for a couple doctors and don't
s
Or ask for samples of the doc's work if they're hard to understand. GI terms are
s
It probably means you're not Indian and won't work for 2 cents a line.
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MT income
I am at #6, but have been an MT for 30+ years.
But for those who need FT income...sm
I can see how that could be a problem for some. It is my intention to get a PT job, and if I don't get enough work, find another to fill it out; then, who ever pays best for the best work and least hassle WINS. However, my DH is the primary wage earner around here. My income helps, but we don't require it to live.
income
I live in New York, have been doing MT for 15 years and during all of that time I have needed to work 50 to 70 hours a week. I started on working mostly from tapes. When the dictations started coming through the computer and I started using word expanders, income went way up. But so has my rent - used to be $750, now $1100. And my son eats a lot more at 14 than he used to! A few years ago I started working for 2 services for extra money... but now I couldn't get by without 2 jobs. The first job used to pay well, but with a combination of a new platform and VR, plus being transferred to a different account at a lesser line rate, I make thousands less from them than I used to. I am changing companies. Would love a 40 hour work week but don't think it's possible.
40,000 not low income
maybe with 10 children.. I know of one circumstance (in my state, and some others) where a person can make a decent amount of money (sky's not the limit, but 50,000 range is OK) and still get Medicaid. It's a program for working people with disabilities, whose medical expenses are extremely high and would not be covered by regular insurance - including services of home health aide and transportation to medical appointments, equipment, etc etc). I am on this program (which I was not told about by Medicaid workers, had to do my own research). So I am in the curious position of receiving government assistance (Medicaid only, not food stamps or disability payments) and working/paying taxes at the same time.
Likely the OP is not in this category.
Income Tax after Death
I have a friend whose mother passed away in March of this year. She was an IC and thus earned income right up until the time of her death. Is her daughter now responsible for filing an income tax return and/or paying taxes on this income? I know an accountant for her would be handy in this situation, but I thought I might get some opinions here as well. Thanks!!
Disagree - it is NET income
You pay your social security on your NET income not your gross, after all your deductions and look around you will find them. Also you are only paying 7.5% MORE than if you were an employee. Again, as an employee you have the convenience of someone controlling and withholding your income tax while as an IC you do it. I have more usable income as an IC than as an employee because of my deductions. If your husband is working have him take one less deduction or have them hold out a specific amount that will offset what you make, they will do that and that way you don't have to worry about paying quarterly taxes. The IRS doesn't care who pays as long as if you are filing jointly the tax has been paid.
He can't cut his income intentionally.. sm
It's written into the divorce decree (if you have a halfway decent attorney) that income cannot be reduced.. and even if it is.. the child support and other payments remain the same as ordered. Been there...and done that..
Monthy Income
I would like to know what short cuts "nm" is using in order to make $60K a year. Maybe that will help us all make more money. Thanks.
Yearly income
I have three 1099's here in front of me -- one for 24K, one for 13K, and one for 5K. My W2 one is for 14 almost 15K. I did work without 1099 in the amount of 3K. The reason that my average goes down on the IRS forms is that after all my business deductions -- which includes my health insurance and 401K and Self employed retirement fund, mileage, supplies, etc. it goes down to less than 20K. Believe me or not, but it is possible and I still have time to go on the boards. I do not work 60 to 70 hours per week.
I have my own accounts and my income
was around $38,000. That is around $3,100 a month. I work M-F and usually work 8-hour days, though there are times I need to put in an extra hour or two on the weekend or in the evening when the work is really coming in. If you work for someone else, that person is charging at least 3-4 cents per line over what they are paying you in order to turn a profit, so if you are making 7 cpl, you can bet they're charging at least 11 cpl, if not more. At 11 cpl, if you can achieve 1400 lines a day, that would be around $3000 a month. That would be 175 lines an hour and that is not an extraordinary amount for an experienced MT with Expanders and other production tools in place. I would venture a guess that most saying they make that much have their own accounts and those making less than that a month work for someone else.
Low income housing?
My sister is getting divorced and wants to move into this place that bills itself as "low income". They told her they would take 30% of her income. BTW, she is also an MT. She says she makes about $1350 a month, but has a van payment and various bills. I am asking on here because the place won't answer any of her questions right now. She needs to be moved by the 15th of March. I am wondering if anyone knows how they can take over $400 of her income and still call themselves "low income" that doesn't seem fair. I knew a lady that lived their with one child and paid less than $10 a month. I mean what about her other bills? She has 4 little children (twins 4, and 6- and an 8-year-old). I hate to see her move in there and overpay. My mom and I don't know what to tell her. She's been through quite an ordeal already. Any help would be appreciated. Thanks! Aunt Maria
annual income
Watch out, you will be accused of being childish from the same person who refers to "some" fellow MTs as unfortunately not having a brain. Hmmm, pot calling the kettle black? That was so rude and so not called for.....is that necessary!
20K is my taxable income
Boy you guys do not know how to read financial statements or know the first thing about running your own business. That is my taxable income. I start out about 55K and end up paying taxes on only 20K if that. I support myself in a very unique lifestyle living on a floating home. I contribute 15K to a my own retirement fund. I have NO debt. And I probably spend no more on gas than if I were working at a hospital but I get to deduct the mileage which is a good deduction. The only outlay that I have that I would not have if I were working for someone else is supplies -- sticky paper and toner. I have looked at employee versus IC or business owner and I am so much more ahead financially doing it this way. A lot more usable income. And I only work 30 hours per week even with deliveries and pick-ups. So before you speak, learn how to realize what is net, gross and taxable income.
loss of income
I think this is happening to many of us in this profession. I am making two thirds of what I made 13 years ago and there is no way to get clients in my area as one hospital went out of business, two merged and gave the docs laptops and the largest only uses one service and has a 10 year contract but I have heard they are giving all new doctors laptops too. The hospitals in my area own most of the clinics, family meds and speciality offices too. Time for me to think about something else.
income taxes
Hi - Now working as an IC. Can anyone tell me what form or format you use when filing your taxes to list deductions from work-related items. Would appreciate any help on this. Thanks
Income potentials...
There are so many variables to that, but since no one has posted yet...
I think the average for a newbie (which you will be starting out until 2 years) is around 5-7 cents per line. The average after your "2 years of experience" goes up to about 8-10 cpl. There are so many variables, and every company is different. Of course, if you were to be running your own business, that is another story altogether, which maybe someone else will respond to (as I have no idea on that). Most companies require between 1000 to 1200 lines per day (full time) to 5000 to 6000 (part time). That is my understanding as a general rule. I'm not an expert, but that might give you some idea anyway. There is a website/magazine called Advance for HIM. They have a salary survey on their website for MTs you might find helpful.
Hope this helps!
Rae
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