Why does an employer prefer to pay via a W2 instead of 1099 (consulting, 2 month project)?

A short answer would be IRS has provided guidance on contractor vs. employee. You can also take a look at form SS8 from IRS. The classification of employee vs. contractor is based on various factors behavioral, financial, the relationship between both parties etc.

Also, employers end up pa...

Why would someone want to start a business as sole proprietorship?

A simple answer to your question is its easy to start. You can be a business owner today with a small capital and start your business. Eg : You see so many consultants, freelancers, artists. Also, many are not aware of the advantages of incorporation. Therefore, many start out as sole proprietors...

I've just incorporated an LLC (single person). I have no plans to immediately hire someone. Do I need an EIN? Should I get one anyway?

Yes you will require an EIN number as a single member LLC. You will require this to open a bank account, various permits, and licenses, filing taxes, hiring employees.

EIN is the unique identification number similar to SSN for individuals. IRS has made it very easy to apply for an EIN # on...

Incorporation: What are common mistakes to avoid when setting up an LLC?

Before you decide to setup either an LLC or an INC, we highly recommend that you discuss taxation with your CPA or tax professional. Request a report that outlines your estimated federal & state taxes based on your projected income. It should provide the following information.

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Is it okay to work on 1099 instead of W2?

IRS has provided clear guidelines via form SS8 regarding contractor vs employee relationship.

Overall there are various factors -behavioral, financial, the overall perception of employer worker relationship etc play a very important role in choosing the right classification.

Your co...