DS met with the potential employer Wednesday. Some good news, some bad news. Decisions need to be made on both sides. First off is the owner (who has one other full time employee and one part time) wants to pay as contract labor, with a 1099 at end of year instead of a W-2. The downside of course, would be that DS would be paying his own taxes, he would be incurring more tax as he has to pay the full Social Security tax as a self employed person. He would get to deduct some expenses on his tax return, such as his health and dental insurance premiums and half of the social security paid and I'd have him deduct his cell phone as a business expense. I'm still looking into his mileage, but that is a sticky area and I'm finding answers on both sides of the coin on that one. I'll consult a CPA, if DS decides to take the job.
I really emphasized to DS that paying his own taxes he would have to be VERY disciplined to set that money aside each paycheck so he can pay his quarterly tax estimate. On his own, I don't think he'd do too well on that, but still living here at home (which he plans for quite awhile) I would make sure it happened and hopefully get him into a routine of setting that money aside and not touching it.
I ran the numbers comparing a $40k a year job (that is the salary range of jobs DS has been applying for) as an employee compared to a $40k a year job as contract labor, with taking some of the expenses on his tax return. Basically he'd pay about $2000 more in taxes as a contract labor compared to an employee. He'd also not have a benefit package and the employer would not be paying into unemployment.
The pro's are that since DS would be paid half of the website work done - there is the potential to make quite a bit more than the $40k a year, thereby making up for some of the cons. The company owner also stated that he treats his employees well and when he is making more than expected he gives out nice bonus's. Most recently giving his full time employee a gift worth $3000. DS has already worked a few hours updating and sprucing up his company website and the guy paid him $200 for that and also gave him an extra $100 for spending afternoon with him and going on some service calls. DS really likes him and enjoyed the work he observed while going on the calls.
If website work is slow, then DS would help out in the computer repair side of the business, so sounds like enough to keep him busy 40 hours a week. At this point, the owner is still trying to decide on an hourly rate for that work. That is really the only hold up now, waiting to hear his decision on that and confirmation on the requirement that DS needs to at least make a base salary and not solely rely on website jobs coming in.
DS and I have discussed this at length the past 2 days. Finding a job, in this economy and with very little experience, has proven to be very hard. I told him he should take this job and just see how it goes for 3-6 months. He's really got nothing to lose and it could potentially turn out to be a very decent salary for him. The company owner sounds like he has lots of great ideas to expand his business, the main one now being adding website design. He just put the word out at the beginning of this week and already has 2 jobs lined up worth $2,000 each.
On another good note: DD had a job interview yesterday for the hostess job she applied for a couple of weeks ago. They will let her know next week. It was her very first interview ever and she was so nervous. She thought it went well and said the 2 managers interviewing her were very nice and asked her if she was nervous, since it was her first interview. She said, yes, a little and they told her well, it doesn't show! Hopefully she will get the job. She knows 2 of the other people that work there, so that is good references for her.