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Hello Fat Wallet, I have mostly lurked here, but I have a question now †I currently live in Nevada, but plan on working as a I9 contractor in NY for less than a year. † I have seen the Per Diem rates and M&IE on the GSA for the city for each month, and I am wondering, does that apply to me? †

Can you guys help me out with how this would work out? Let's assume I make 1500/wk as an I9 contractor. †How would the GSA numbers apply to me? Is each day's per diem and M&IE for the given month(306 per diem + 74 M&IE) non taxable? Thanks!

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My head hurts.

I have edited my post to get straight to the point of my question. how much I will get per wk as a contractor, how much of that can be tax free as a contractor working across the country. thanks!

I9 is an immigration "right to work" form, and has nothing to do with the IRS. Do you mean 1099 contractor?

If so then you can claim per deim but if you are only making 1500/wk then you will not be able to charge the full amount. (the numbers are a max) In general you can claim up to about half of your rate, if you are working for a contracting agency then they have to do it for you and you will be on a W2. 1500/week is WAY under for NYC either way.

Once you claim more than 50% the odds of you getting an audit go up. Been there, have the scars. It had BETTER be W2 at that rate to even be in the realm of enough. Coming from NV you are in for some nasty sticker shock. (assuming NYC at 306 lodging) If its a 1099 at $35/hour for NYC run away... that is WAY too low.

Essentially: on 1099 you have to pay ALL the taxes but have more latitude to write off expenses including hotels without needing the employer to "qualify" you.
on W2 contracting your company pays all the taxes and pulls out qualified expense before taxes and pays you but will not exceed 50% of your rate. Or less, I am getting shorted by mine ATM.

mwang2013 said:   Hello Fat Wallet, I have mostly lurked here, but I have a question now †I currently live in Nevada, but plan on working as a I9 contractor in NY for less than a year. † I have seen the Per Diem rates and M&IE on the GSA for the city for each month, and I am wondering, does that apply to me? †

Can you guys help me out with how this would work out? Let's assume I make 1500/wk as an I9 contractor. †How would the GSA numbers apply to me? Is each day's per diem and M&IE for the given month(306 per diem + 74 M&IE) non taxable? Thanks!

† The answer is, the per diem rates will not apply to you at all. †You are only allowed to deduct meals and lodging expenses when you are away from your "TAX HOME" "TEMPORARILY" "ON BUSINESS". †IRS has a publication outlining the rules for independent contractors. †Review that first to be sure that you qualify as an independent contractor. †IRS also has a publication on allowable expenses when you are temporarily away from home on business. †From the facts you've given, it appears NY would be your tax home for that job, and you would not be allowed to deduct any expenses while you are there for meals and lodgings. †If you receive reimbursement for non-deductible expenses, those amounts will be added to your income and be subject to income tax.
If the situation is such that you are considered to be temporarily away from your tax home on business and will be entitled to deduct meals and lodgings expenses, you can deduct the ACTUAL costs of lodgings. †For meals and incidentals, you can either deduct the actual expenses (properly documented), or the GSA per diem allowance for the location where you are staying. †If the contractee reimburses you for the meals and incidental expenses, you can deduct the full amount. †Otherwise, you can only deduct 1/2 of the meals.
You should talk with a tax professional about the various issues, and also someone that can explain any possible tax and licensing consequences for the State of New York and local governments while you're working there.††

jhburgess said:   
mwang2013 said:   Hello Fat Wallet, I have mostly lurked here, but I have a question now †I currently live in Nevada, but plan on working as a I9 contractor in NY for less than a year. † I have seen the Per Diem rates and M&IE on the GSA for the city for each month, and I am wondering, does that apply to me? †

Can you guys help me out with how this would work out? Let's assume I make 1500/wk as an I9 contractor. †How would the GSA numbers apply to me? Is each day's per diem and M&IE for the given month(306 per diem + 74 M&IE) non taxable? Thanks!

† The answer is, the per diem rates will not apply to you at all. †You are only allowed to deduct meals and lodging expenses when you are away from your "TAX HOME" "TEMPORARILY" "ON BUSINESS". †IRS has a publication outlining the rules for independent contractors. †Review that first to be sure that you qualify as an independent contractor. †IRS also has a publication on allowable expenses when you are temporarily away from home on business. †From the facts you've given, it appears NY would be your tax home for that job, and you would not be allowed to deduct any expenses while you are there for meals and lodgings. †If you receive reimbursement for non-deductible expenses, those amounts will be added to your income and be subject to income tax.
If the situation is such that you are considered to be temporarily away from your tax home on business and will be entitled to deduct meals and lodgings expenses, you can deduct the ACTUAL costs of lodgings. †For meals and incidentals, you can either deduct the actual expenses (properly documented), or the GSA per diem allowance for the location where you are staying. †If the contractee reimburses you for the meals and incidental expenses, you can deduct the full amount. †Otherwise, you can only deduct 1/2 of the meals.
You should talk with a tax professional about the various issues, and also someone that can explain any possible tax and licensing consequences for the State of New York and local governments while you're working there.††

††
He could deduct full GSA rate (vs actuals) if he was there long enough. †But only if he is 1099. †My last company (B2B on W2) that paid travel only paid 75% on those types of travel, which was still enough for most areas. †If your company has a "qualified" plan you pretty much can't claim anything and the company will directly reimburse you. †If it is UNqualified travel w/W2 then you can claim actuals up to GSA max.


forbin4040 said:   I9 is just Verification of work (Visa / Passport / SSN Card) etc.
The M&IE and GSA terms are little high level for a person who doesn't know the difference between a W9 and a I9.

So this is my response:
Hello Mwang2013. I believe your business school gave you a project, and you are looking for FW to solve it. Sorry, but I don't answer school work.

† Ok I mean 1099 and somehow always keep saying I9. Thanks for correcting me everyone. †I am new to contract work. †No I am not in business school. I am an occupational therapy assistant, and I am licensed in and have worked in NV and CA. †I also just got licensed in NYS as an OTA. †Not sure why you are jumping to conclusions just because I am a noob trying to understand contract work away †from home better. † My diploma, just so you know that I am not some student looking for HW help. †https://s14.postimg.org/72f74jkht/Mike_OTA_diploma.jpg

†You are welcome to go to the NV board of OT and look me up. I am inactive there because I don't work in NV currently. †I am curently working in CA, and you can find my license at the CA BOT, I recently got licensed in AZ just because my wife and I thought about working there, and of course NY. †It is all public information.

RedWolfe01 said:   
jhburgess said:   
mwang2013 said:   Hello Fat Wallet, I have mostly lurked here, but I have a question now †I currently live in Nevada, but plan on working as a I9 contractor in NY for less than a year. † I have seen the Per Diem rates and M&IE on the GSA for the city for each month, and I am wondering, does that apply to me? †

Can you guys help me out with how this would work out? Let's assume I make 1500/wk as an I9 contractor. †How would the GSA numbers apply to me? Is each day's per diem and M&IE for the given month(306 per diem + 74 M&IE) non taxable? Thanks!

† The answer is, the per diem rates will not apply to you at all. †You are only allowed to deduct meals and lodging expenses when you are away from your "TAX HOME" "TEMPORARILY" "ON BUSINESS". †IRS has a publication outlining the rules for independent contractors. †Review that first to be sure that you qualify as an independent contractor. †IRS also has a publication on allowable expenses when you are temporarily away from home on business. †From the facts you've given, it appears NY would be your tax home for that job, and you would not be allowed to deduct any expenses while you are there for meals and lodgings. †If you receive reimbursement for non-deductible expenses, those amounts will be added to your income and be subject to income tax.
If the situation is such that you are considered to be temporarily away from your tax home on business and will be entitled to deduct meals and lodgings expenses, you can deduct the ACTUAL costs of lodgings. †For meals and incidentals, you can either deduct the actual expenses (properly documented), or the GSA per diem allowance for the location where you are staying. †If the contractee reimburses you for the meals and incidental expenses, you can deduct the full amount. †Otherwise, you can only deduct 1/2 of the meals.
You should talk with a tax professional about the various issues, and also someone that can explain any possible tax and licensing consequences for the State of New York and local governments while you're working there.††

††
He could deduct full GSA rate (vs actuals) if he was there long enough. †But only if he is 1099. †My last company (B2B on W2) that paid travel only paid 75% on those types of travel, which was still enough for most areas. †If your company has a "qualified" plan you pretty much can't claim anything and the company will directly reimburse you. †If it is UNqualified travel w/W2 then you can claim actuals up to GSA max.


† I have only learned about GSA from other travel therapists about traveling. †As a traveling therapist working 13 week jobs, the company will pay us a low salary..say $20 an hour, and the rest of the money is paid as the living stipend. †Here is a quote from a recruiter about taking travel work(NOT me working as 1099 employee, but as a travel therapist. I was just wondering if I can go the route of finding contracts myself and cut out the middle man, which is what got me asking that question here to begin with). †Now he does want to make the salary portion $9/hr. I feel that would probably get me audited. But he does that to try to entice me into the job. †I'd probably be more comfortable with around 15/hr taxable. †And †this is nothing new. Therapists and nurses all over the country travel. †Just have to be careful to follow the 3 rules of our †tax home.

"†Letís use $1,200 take home a week as an example. I would pay you $9.00/hour, taxable, and give you stipends for housing of $550/week which is based on 40 hours (prorated at $13.75/hour worked tax free) and $357/week (prorated at $8.93/hour worked tax free). There are some clients that guarantee 30-all the way up to 40 hours a week, some donít guarantee any at all. Theradynamix, and Tendortouch are the Big Dogs in that area for SNF, and neither guarantee hours, but our therapists havenít had any issues getting fulltime hours. We donít want to place you in a facility you wonít be getting fulltime hours as it effects our profit as well. Your take home will always be negotiable, but those Theradynamix buildings are going to pay a max of $1,050/week. I can definitely get higher with other clients. Weíll just have to see what is available."

And †the only reason this would work for me is because I will have family to live with in NY. †I would never take this kind of pay in NYC if I had to pay for my own lodging.

If the company is paying you a housing allowance then that is untaxed and you cannot claim more. The audit trigger is when the weekly housing exceeds half of your salary. (divide it by 40)

The real issue is how they pay the stipend and how they pay you over 40 hours. If its a true split then if you only work 30 hours in one week then you will only get 75% of that stipend for that week. If its a flat rate then they have to pay you regardless of hours. Also if you work 50 hours do you get a higher (albeit all-taxable) rate?

If you are collecting this on W2 and then also doing some 1099 work on the side then you cannot double dip unless the 1099 work adds additional expenses. Like if you took a 1099 job in NJ and had to commute and stay at a local hotel -- you could write that off against the 1099. But if you find more work in a commute range of your place in NY then you cannot claim anything except MAYBE mileage between jobs if you go from one to the other.

You WILL have to claim the 1099 work as customary work too, which means employer and SS taxes as well. (I did a 1099 once as a trainer on equipment that I was a tech for and claimed it as non-customary because I don't generally TRAIN - it was marginal but at least arguable if the IRS poked their nose in)

Edit to add: †My current contract pays the stipend by a days worked basis, so when I worked a 6th day they have to pay it even though it was a 5 hour shift. †



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