I've been a teacher for 12 years. At the end of this semester, I'm going to work for a friend horizontal drilling. My question is... when he pays me, it'll be a check that is handwritten. I'm assuming he won't be taking taxes out, so what is good practice to make sure I am prepared for the hit at the end of the year? His company isn't big, he only has 5 employees, his wife handles the books. They do a ton of work and he makes a ton of money, compared to what I make. Adding me in June will allow him to run 2 crews and double profits. Any advice?

Set back 30% for taxes plus whatever you plan on replacing your teacher retirement. Your best bet is hiring a CPA, 1099 status may open tax breaks?

Will he be paying into your social security?

I haven't asked. Is that a normal practice? I'm pretty ignorant to more than I really should be. I'm 35, and like the "Unemployment" thread, tired of the rat race that public education has turned into. I feel it is comparable to the videos online where people film and degrade/disrespect LEO's. That's what students are turning into.

With that being said, I probably should've paid attention to more retirement, taxes, etc... I'm late to the party for sure. Any tips or advice is greatly appreciated.

Just because he only has 5 employees doesn't mean he's not with holding taxes. Just ask him.

I will do that, and ask about social security. I guess benefits and insurance are something normal to ask about as well? Keep the advice coming, I appreciate it.

if he is going to 1099 you then you need to hire a cpa, he won't take a penny out for taxes if he does it right.

1099 will mean you are hired as a contractor, all benefits, taxes, insurance, WORK COMP etc. are now on you to provide.

were I you I would have a sit down over a beer or 3 and discuss wages, how paid etc. before you jump off the deep end.

if they are holding taxes then I would still suggest you talk to a cpa or financial advisor on how to set up retirement accounts and insurance type stuff.

good luck

I’ll bet he withholds taxes.

This is definitely happening, thanks for the advice.

Based on what you described I suspect you will be an independent contractor and not an employee. This means you will be on your own for insurance and will pay twice as much in FICA taxes as an employee. Will also need to file quarterly payments to IRS or risk penalty when final taxes due. On the plus side you will have some business deductions and can set up an individual 401(k).

As others have mentioned, you really need to talk with your friend and how this situation is going to go down. From what you've said, it sounds like he's planning to just pay you "under the table" which I think will get you both in trouble if/when you file taxes claiming income from him. If you're going to work for him as an independent contractor (1099), you'll probably have to apply for an LLC which will cost you some $$ too. In addition to paying your own insurance and unemployment. Once you start adding all of that up, you won't be making as much as you thought you were.

i am an independent
no taxes withheld
no insurance provided
stash some cash & hope for a windfall in April

Especially insurance and workmans comp.

What grade do you teach?

You teach in a rural area? Urban? Suburban?

Good luck with the new career!

26 Years self employed.
Find yourself as suggested a good honest (not ex wife's father) CPA to assist you through the year keeping track of the endless amounts of paper trail stuff you have to keep up with.

Remember:
Your withholding for social security/medicare is doubled.
Your ability to get credit on expenditures is large but complicated. (Home office, vehicle depreciation, stuff like that)
And above all else, you are going to absolutely start to hate the government. When you write the check yourself, you realize just how big a blood sucking vermin can be.