Worker Shortages and Impact on ER

[perinova]

Is contracting the same as being self employed?
You set-u your solo-401k,you buy your own health coverage, your vacation is unpaid, between contracts=no pay either.
To come out ahead financially you need to get at least 2.2x hourtly wage. Can you get this through an agent?

[Delawaredave]

"Worker shortage" - seems hard for me to believe.* Major forces not supporting a "shortage":
* * *- Large pools of immigrants (not just unskilled)
* * *- White collar offshoring (just beginning - we haven't see anything yet)
* * *- Large numbers of 60+ boomers not able to retire and still working
* * *- Continued productivity increases

I also do hope that "professional part time" opportunities increase - I think they will because of technology (internet/videoconferencing/etc) - not because of any worker shortage.

I read an article about "Virtual Companies" - companies where nearly all functions are outsourced webs of independent contractors - teams are pulled together for products/projects from people around the world who collaborate electronically.

I'm hoping to "downshift" to contractor gigs for 20 hours/week - preferably in different cities/countries.* *

[Ed_The_Gypsy]

Quote:

Is contracting the same as being self employed? You set-u your solo-401k,you buy your own health coverage, your vacation is unpaid, between contracts=no pay either.

You're getting warm!* *

Quote:

To come out ahead financially you need to get at least 2.2x hourly wage.

I think your numbers for benefits may be high or maybe your base pay is low.* I make about 60% more than a staff engineer (have made more, but not today).* I work afield as an engineer and can get up to 35% of my income as per diem (or the local equivalent), which is not reported for taxes.* I need this to live but if I can live cheap, it goes home.

We get our health insurance through my wife's job.* We used to get it through COBRA.* A pre-existing condition prevents us from getting an individual policy, but we have managed so far.

I have not contributed to my retirement funds for several years trying to pay off debts, including college for two kids.* What retirement pot I do have has doubled in the last 5 years, so I am not too worried.

Quote:

Can you get this through an agent?

Very seldom can I get work as a real independent.* I tried to have a company once but it did not work for me.* I work through an agency as an independent contractor, if that makes any sense.* I usually find my own job.* The agency takes care of billing and other paperwork and pays me regularly even if the customer is slow to pay them.* For this, they take a small cut.* If they found me the job, they would take a higher percentage.* They also advise me on local rates and terms.

Quote:

Quote from: Ed_The_Gypsy on September 04, 2006, 02:08:22 PM Be aware that once you go contract, you will forever be a pariah.* Seldom will a company hire someone who has been a contractor.* They fear your independence and your unwilllingness to work unpaid overtime. Ed ! Not true at all in my experience. Contracting was the best way to get job offers. They 'try' before they buy

OK, I exaggerated.* In fact, I once got a staff job that way.* However, in my case, I cannot afford to take a staff job now, even if I wanted to.* There has been nothing anywhere near home and relocation is generally not available (even if I could get the wife to consider moving).* My profession is a dying one and opportunities are thin, unless one travels.*

Contracting does have its attractions including relative isolation from office politics, but it is not for everyone and there are negatives.

Ed

[Delawaredave]

Quote:

Originally Posted by Ed_The_Gypsy I work through an agency as an independent contractor, if that makes any sense.*

Do contractor agencies pay you under a W2 or a 1099 ?* Do you have a choice ?* *If it is a 1099, I'm assuming you can be "set up as your own business" - with you as an employee - and deduct business expenses assoicated with finding/executing your contracting - correct ?

If it is a W2,* my understanding is expenses are deductible only above an AGI percentage.

Thanks for any comments.

[Martha]

If it's W2, then you are not an independent contractor, you are an employee getting wages with the employer deducting FICA and taxes.

[2B]

I'm technically an employee; but if my employer doesn't get a contract, I'm toast.

[Ed_The_Gypsy]

Delawaredave,

I am contracting in Canada. I don't get a w-2.

When I contract in the US, I am not an independent contractor. I am an employee of the shop and I get a W2, but I only get paid when they have a contract. I can't deduct anything, but I do get a big chunk of my compensation cut out as per diem.

It is not complicated. Better than trying to do it 100% on my own.

Ed

[perinova]

Quote:

Originally Posted by Delawaredave Do contractor agencies pay you under a W2 or a 1099 ? Do you have a choice ? If it is a 1099, I'm assuming you can be "set up as your own business" - with you as an employee - and deduct business expenses assoicated with finding/executing your contracting - correct ? If it is a W2, my understanding is expenses are deductible only above an AGI percentage. Thanks for any comments.

yes you are right about the deductions. I am not sure if there is always a choice but you can at least try to find the type of contracting that suits you better:
W2 (employee of contract agency). unreembursed expenses on 2106 and schedule-A is valid only if you itemize
1099 (under your own SS) use schedule-C
CORP-to-CORP (under your company SS) S-copr use schedule K and that's a lot more complicated.
Maybe an unincorporated business can use schedule-C I am not sure?

[Spanky]

Quote:

I read an article about "Virtual Companies" - companies where nearly all functions are outsourced webs of independent contractors - teams are pulled together for products/projects from people around the world who collaborate electronically.

How about outsourcing management or CEO?