So I figured my wife and I may need professional advice but I'm hoping someone can help me understand all this a bit better before we go there...
My wife gets paid as a W2 employee by her practice but each month she also receives 1099 income from the hospital she works at. The 1099 income from the hospital is a loan associated with her salary guarantee. The 1099 income must be surrendered to her practice each month so they can use that to pay her W2 income (WTF?!).
We discussed with them and this is the way the hospital/employer insists it must work. Each month the hospital pays her X as 1099 income. She writes a check for X to her practice. Her practice pays her Y on a W2. This seems utterly ridiculous to me but we already established that they won't change it.
I'm curious to see if...
1) Has anyone ever experienced this before?
2) The practice has told us that since the 1099 income is a loan, we shouldn't be taxed twice - as in since we're paying W2 taxes...we won't have to turn around and pay self employment taxes on the same 1099 income at the end of the year but the best they tell us when we ask more is "go talk to a CPA." Is that true?
3) Since we're in this situation anyway, can the 1099 income be used to start a solo 401k for retirement savings since for other unbeknownst reasons, she does not have access to a company retirement plan this year.
My wife gets paid as a W2 employee by her practice but each month she also receives 1099 income from the hospital she works at. The 1099 income from the hospital is a loan associated with her salary guarantee. The 1099 income must be surrendered to her practice each month so they can use that to pay her W2 income (WTF?!).
We discussed with them and this is the way the hospital/employer insists it must work. Each month the hospital pays her X as 1099 income. She writes a check for X to her practice. Her practice pays her Y on a W2. This seems utterly ridiculous to me but we already established that they won't change it.
I'm curious to see if...
1) Has anyone ever experienced this before?
2) The practice has told us that since the 1099 income is a loan, we shouldn't be taxed twice - as in since we're paying W2 taxes...we won't have to turn around and pay self employment taxes on the same 1099 income at the end of the year but the best they tell us when we ask more is "go talk to a CPA." Is that true?
3) Since we're in this situation anyway, can the 1099 income be used to start a solo 401k for retirement savings since for other unbeknownst reasons, she does not have access to a company retirement plan this year.
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