What do these three things have in common:  1099, TEKsystems, convenience?  Absolutely nothing.  Here’s the story:  My business is needing some extra revenue for the next couple of months to fill in some gaps.  So what do we do?  We go out to some recruiting agencies to get some short temp work.  We wanted to do it on just a 1099 basis (1099 is IRS-speak for independent contracting) so we don’t have to mess with getting our employees on a W-2 basis with the company (TEKsystems).  That would make it a nightmare to transfer that money to the business then.

Ok, bear with me.  TEKsystems says they have two options: W-2 or Corp-to-Corp.  What, no 1099?  Who doesn’t do 1099’s?!?  Its the easiest thing in the world to do; no taxes, no hassle.  Well, apparently they don’t.  They would require each of our employees to set up their own corporation in order to be paid on a 1099 basis.  Can you say Jeppys, Inc.?  I can’t, and I won’t. 

Bottom line:  They would be great to work for if I just wanted some money for myself (good money at that), but they won’t work with businesses.  It really makes no sense that a company that provides employees for needing companies won’t provide employment opportunities to needing companies.  Geesh…

3 thoughts on “Incorporated?”

  1. 1099 = the devil! I get them from companies I work for and it really bites! Like a shark in the toilet. They (the kinder-gentler IRS) hit you at a rate of just about 50%. Hello tax bracket that I’ll never really deserve! Anyway, Jeppys, Inc. is not hard or expensive to set up. Maybe a rethinking of a position is in order?


  2. Well said. A couple of thoughts:
    1. If a business (my company) is getting the 1099, the taxes are actually absorbed by company expenses throughout the year so the business doesn’t pay nearly as much on that 1099 (directly) as I would if I received it myself.

    2. Even if I did receive it, the taxes I’d pay happen to be what I would normally have withheld under the W-2 PLUS the taxes my company would absorb for me (SS, etc.). I’m not sure, but I think that 1099’s still tax you more.

    On a better note, TEKsystems did say that they will work with us in that they will 1099 my company directly for any work that I do. That way, I never have to be involved. 🙂


  3. 1099 to the comapny is different. I get them directly to me and then I have to absorb the impact. It’s great during the year, but April is no fun!
    1099’s hit me at about 45%
    Normal taxes 17-20%


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