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This happens to me too, but occasionally you will find a gig that is 1099 and it’s nice to have the LLC option. Big agencies are often W2 but there are so many other clients and projects you can do 1099 when you work for them directly.
I did the same and it took about 6 months for it to pay off. I have an agency client who uses me on several different accounts and puts me on a new work order every time an account gets a few labor hours approved for me 😑 I finally asked if they could put me on a retainer to cover all accounts and they said yes, if I have an s-corp. Bingo!
But also….your tax rate should be much more favorable so not a loss either way.
It can and will happen and when it does you'll be glad to have it.
Don’t forget to timely file all that ongoing S-Corp paperwork and let us know what your accountant charges you for that
Visual Storyteller
That’s what I was thinking. S corps is a lot of tax paperwork to fill and expensive taxes. Unless you make bank maybe LLC is better?
I’ve worked with 7 different agencies since going freelance. 6x were 1099, only one forced me into W2. So I guess it’s a bit of a luck of the draw in who you’re working with
If you get a gig with a corporate client directly, they will appreciate the structure and the risk insulation it provides to them.
More companies are open to S-Corp than 1099. 1099 is for sole proprietors. S-Corps don't get a 1099, they are considered vendors as opposed to a contractor. If you ask to be on 1099 they will likely turn you down, but might be more open to S-Corp. That is what I've found.