Question

Mary, a single taxpayer, has a new job opportunity at Amazon, she has the opportunity to consider being an independent contractor OR being a full-time employee of Amazon.

Mary understands that if she was self-employed as contractor, Amazon would be her client and she would have additional taxes to pay but would be able to deduct business expenses.

Mary salary as independent contractor would be higher. Assume Mary’s salary $165,000 as contractor but receive no medical care from Amazon. Mary’s salary as full-time employee would be $105,000 and receive healthcare & retirement.

What business expenses might Mary be able to deduct? What other taxes might Mary have to pay as a Contractor? What are the pros and cons of being a contractor vs. a full-time employee?

Answer 1