Wow.. just wow. what a load of crap, I cannot even imagine how many people are working "illegally". Most every programmer I know does some work on the side as a 1 person operation.
How a Tax Law Helps Insure a Scarcity of Programmers (1998)
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Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#12Have things changed? I had no trouble working as a 1099 for a while, nor did any friends. HN and reddit are filled with posts by people claiming to be independent contractors.
How is that one guy with plane is affected by this law, but nobody I've ever talked to is?
Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#13Thanks for posting this. It provided the best explanation so far (for me, at least) of the law that so pissed off Joe Stack.
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Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#14Thanks for posting this. It provided the best explanation so far (for me, at least) of the law that so pissed off Joe Stack.
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Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#15''This is Catch-22,'' he said. ''If you are not legitimate because you start out as a one-person corporation and you haven't been in business for a year, then how do you ever start your business? It is nonsensical.''
Save up at least a year's living expenses, get rid of everything you own, travel the world for a year. You'll save money over keeping it, see the world, write some code on your laptop at hotels. Get one of those netbooks that will fit in a backpack. Charge it up at the coffee shop. You can get good wireless cheap overseas. Room and board is cheap.
Make arrangements to work with companies while you are away. Start getting paid the next tax year.
''Basically the I.R.S. is saying it would rather collect less revenue with less cheating than collect more revenue with more cheating. Does that make economic sense?''
It is interesting that what is proposed here as more profitable government policy encourages cheating, something we don't appreciate in our species.
Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#16Thanks for posting this. It provided the best explanation so far (for me, at least) of the law that so pissed off Joe Stack.
Thanks for the link. Obviously, I don't follow the news that much.
Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#17Does this mean if you're a freelance programmer, you're at risk of running afoul of this law - as Joe Stack did - if you're trying to negotiate programming contracts directly with the client rather than through an agency? My understanding is that you can protect yourself from this law by working through employment agencies as a W2 or Corp-Corp contractor? Is that correct? Is so, then perhaps the programmers I've met…
The article says that if you're incorporated, and the only person hired, it changes nothing.
Not just the article, but the senate directly referenced such no-nos:
"For example, an engineer retained by a technical services firm to provide services to a manufacturer cannot avoid the effect of this provision by organizing a corporation that he or she controls and then claiming to provide services as an employee of that corporation."
Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#18Here's my experience working as an independent status. Once a megacorp wanted to hire me as a consultant. The problem was that this megacorp had a list of "approved-vendors" to do consulting work for them. To get into the list was a time consuming and expensive hurdle. What did the hiring manager do? He asked me to join one of these approved vendors temporarily and billed through them. And this vendor got a cut out of it. Apparently it's a common problem that they did it alot. When I told the consulting firm my agreed rate was $200/hr, the guy said their contracting rates were never even close to that. Sweet time.
Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#19This is confusing. The clear text of the article says that programmers can't do individual contracting, which is insane and clearly wrong. The examples (e.g the contracting company with 50 "workers", none of whom were technically "employees" of anyone but themselves) don't seem nearly so clear cut.
I mean, if this is really an important law to understand, wouldn't the idea of good journalism be to tell me how to avoid breaking it? I don't see that at all here. It reads like just another "tax is bad" screed.
A pointer to the text of the law, or a less sensationalist presentation would be very appreciated.
Re: How a Tax Law Helps Insure a Scarcity of Programmers (1998)
#20anyone got a link to the actual law itself?