Hi,

I work as an employee in a group with a W2 income. Recently, an agency asked me to do some review work for medicare which pays well. I have the options of getting paid through my work place which they have contract, or compensated as an individual contractor. Which one is better for the tax reduction? I alredy max out my 403b at my work. What is my options to save more for retirement using this potential income? or do i need to set up a corp?

Thanks

BL

Zip Code: 14534

Ben-

You would probably be better served, from an income tax perspective, working as an Independent Contractor.

You can then deduct your professional expenses against this income. If you are paid as an employee, you would claim your professional expenses as an intemized deduction (which is subject to certain limits).

You can also contribute monies to a pre-tax retirement account (like a Simplified Employee Pension plan) to further reduce your taxable income - above and beyond your current 403(b) plan.

Hope this helps.

Larry

Check out an article I wrote called Memo to Moonlighters available at:

http://www.mdtaxes.com/news0205.html#2

This article shows some of the tax saving opportunities and pitfalls of being compensated as an independent contractor.

Zip Code: 01801