New 1099 employee with Cobra insurance
For the first four months of the year, when you were an employee, the health insurance premiums were paid for with pre-tax money.  When you receive your W-2 at the end of the year, the amount in Box 1 of the W-2 will be reduced by the amount you paid for health insurance.  You can't deduct it on your tax return because it has already been deducted for you. Now that you are a 1099 independent contractor, you are self-employed and eligible for the self-employed health insurance deduction.  However, as you noted, the COBRA premiums are likely not eligible for this deduction, because the policy is in your old employer's name.  See this question for details, but keep in mind that there are conflicting answers on that question. "While COBRA premiums are not eligible to be a ""business"" expense they can be a medical expense for personal deduction purposes.  If you're itemizing your deductions you may be able to deduct that way.  However, you will only be able to deduct the portion of the premium that exceeds 10% of your AGI. Are you a full time employee now or are you a 1099 contractor?  Do you have access to your employers health plan?"
Health insurance varies wildly per state and per plan and per provider - but check them out to have a baseline to know what it should cost if you did it yourself. Don't forget vacation time, too: many contract/comp-only jobs have no vacation time - how much is that 10 or 15 days a year worth to you? It effectively means you're getting paid for 2080 hours, but working 2000 (with the 2 week number). Is the comp-only offer allowing overtime, and will they approve it? Is the benefits-included job salaried? If it's truly likely you'll be working more than a normal 40 hour week on a routine basis (see if you can talk to other folks that work there), an offer that will pay overtime is likely going to be better than one that wouldn't .. but perhaps not in your setting if it also loses the PTO. "Littleadv is incorrect because receiving a 1099 means she will be taxed self-employment tax on top of federal income taxes. Your employer will automatically withhold 7.65% of payroll taxes as they pay you each paycheck and then they'll automatically pay the other half of your payroll tax (an additional 7.65%) to bring it to a total of 15.3%. In other words, because your wife is technically self employed, she will owe both sides of payroll tax which is 15.3% of $38k = $5,800 on TOP of your federal income tax (which is the only thing the W-4 is instructing them about what amount to withhold). The huge advantage to a 1099, however, is that she's essentially self-employed which means ALL of the things she needs to run her business are deductible expenses. This includes her car, computer, home office, supplies, sometimes phone, gas, maintenance, travel expenses, sometimes entertainment, etc - which can easily bring her ""income"" down from $38k to lets say $23k, reducing both her federal income tax AND self-employment tax to apply to $15k less (saving lets say 50% of $15k = $7.5k with federal and self employment because your income is so high). She is actually supposed to pay quarterly taxes to make up for all of this. The easy way to do this is each quarter plug YOUR total salary + bonus and the tax YOU have paid so far (check your paystubs) into TurboTax along with her income so far and all of her expenses. This will give you how much tax you can expect to have left to owe so far--this would be your first quarter. When you calculate your other quarters, do it the exact same way and just subtract what you've already paid so far that year from your total tax liability." Health insurance is tough, as you know, because the offerings vary dramatically by State, and there is the added complication of the Affordable Care Act, which depending on where and who you are has had either a good or bad impact on the available options. If you are a sole proprietor or other business person, I'd advise talking to someone at a local chamber of commerce. Also, professional organizations like the IEEE or ACM (for IT professionals) often offer catastrophic medical or other health plans. Some employer plans give you the option to continue coverage at a higher cost when COBRA lapses as well. If you can't afford a comprehensive plan, make sure to get something to protect you against pre-existing conditions or hospitalization. Edit: Let's forget about Wikipedia.  From the horse's mouth: The cafeteria plan rules require that a health FSA provide uniform coverage throughout the    coverage period (which is the period when the employee is covered by the plan).  See Proposed    Treasury Regulations Section 1.125-5(d).  Under the uniform coverage rules, the maximum amount    of reimbursement from a health FSA must be available at all times during the coverage period.  This    means that the employee’s entire health FSA election is available from the first day of the plan year    to reimburse qualified medical expenses incurred during the coverage period.  The cafeteria plan    may not, therefore, base its reimbursements to an employee on what that employee may have    contributed up to any particular date, such as the date the employee is laid-off or terminated.  Thus,    if an employee’s reimbursements from the health FSA exceed his contributions to the health FSA at    the time of lay-off or termination, the employer cannot recoup the difference from the employee. (emphasis added)  http://www.irs.gov/pub/irs-wd/1012060.pdf Uniform Coverage Rule The IRS has required that “health FSAS must qualify as accident or health plans. This means    that, in general, while the health coverage under the FSA need not be provided through a    commercial insurance contract, health FSAS must exhibit the risk-shifting and risk-distribution    characteristics of insurance.” This concept has led to the “uniform coverage” rule.  The uniform­coverage rule requires that the maximum amount of an employee’s projected    elective contributions to a health FSA must be available from the first day of the plan year to    reimburse the employee’s qualified medical expenses, regardless of the amount actually    contributed to the plan at the time that reimbursement is sought.  Citing proposed Treasury Regulations Section  the IRS General Counsel has    determined that:  “Under the uniform coverage rules, the maximum amount of reimbursement from    a health FSA must be available at all times during the coverage period. The    cafeteria plan may not, therefore, base its reimbursements to an employee on what    that employee may have contributed up to any particular date, such as the date the    employee is laid-off or terminated. Thus, if an employee’s reimbursements from    the health FSA exceed his contributions to the health FSA at the time of  or    termination, the employer cannot recoup the difference from the employee.”  This rule is unfair and also constitutes a disincentive to establishing FSAS because of the    exposure to out-of pocket expenditures arising from employees who leave the company.  NSBA believes that the uniform coverage rule should also be revised if the  or lose-   it rule is changed. Revising the use-it or lose-it rule while leaving the uniform coverage rule unchanged will introduce an inappropriate asymmetry to FSAS. An employer should    be allowed to deduct any negative amount arising from insuftîcient employee    contributions from a terminating partieipant’s last paycheck. http://www.ecfc.org/files/legislative-news/NSBA_(David_Burton).pdf (emphasis added)  Now, that's some fresh bitterness for you right there.  (Dated August 17, 2012) I don't have preexisting conditions. I am only speaking of how *my own personal* healthcare situation got worse because of the ACA.   I did used to use the dental and vision portions of my company-provided insurance regularly but I don't have that as part of my ACA insurance because again, it is unaffordable. There are several assumptions you made, that don't match the current laws: Costs: COBRA: More than likely you have signed an NDA with your employer with a non-compete clause within it. From what I have seen this clause would be in place for two years following the date you left your firm. So, leaving your firm and consulting as a 1099 for your current client is more than likely a violation of your NDA for 2 years or some period of time. With that being said, there is nothing keeping you from going off on your own as an independent and finding work, so long as that work isn't from one of the current clients of your firm.   I am not a lawyer and everything above is what I have seen in my personal experience. You asked about a signing bonus and were told the conditions that would be required to get one. It does not appear that you will qualify, but you do have another option. Ask if you can start earlier. Some times they can't change the start date. They might have a contractual issue with the customer and the customer is setting the start date. Other times they are waiting for somebody else to retire or transfer. But ask. Tell them starting earlier speeds up the training process. For you it can make the transfer of insurance benefits sooner. Keep in mind it could be a few weeks before you get your first pay check. How were you planning on bridging the gap? One of the triggers for audit is when the IRS can't match 1099 income to the tax return. Whoever got the 1099 in her name should include that income on her return. One way to determine compensation is as a percentage per actual hour billed (and paid by client). Very common place to start is 33% for company overhead/administration (insurance, taxes, office expense, etc), 33% for sales commission/costs (roughly half as direct sales commission, half for marketing), 33% as gross 1099 pay  compensation to the employee. "Based on the updated information  ""I'm able to get my health insurance in full from my old job which is   why still have it(ABC). Anthem Blue cross only costs me about 15   dollars a month. At my new job I work full time so I took up the   healthcare because eventually I will more than likely get rid of my   old one(or loose it)."" There are a couple of issues:  The old company will no longer be paying for the ABC policy, you will have to cover the entire cost. The cost could be significantly m ore than $15 a month. One will be primary and one will be secondary. You will have to tell them about each other. How they will interact when one is a percentage and the other a copay will have to be investigated. Look back at all your procedures from last year, and ask how they would cover them. You will also need to see if your doctors and specialists are in both networks. This could create situations where the 2nd policy provides no coverage because you went out of their network. You could also require multiple referrals." I am not a lawyer or a tax accountant, but from the description provided it sounds to me like you have created two partnerships: one in which you share 50% of Bob's revenue, and another in which you share 50% of the revenue from the first partnership. If this is the case, then each partnership would need to file form K-1 and issue a copy to the partners of that partnership. I think, but I'm not sure, that each partnership would need an Employer Identification Number (EIN; you can apply for and receive these online with the IRS). You would only pay tax on the portion of profits that are assigned to you on the K-1. (If you've accidentally created a partnership without thinking through all the ramifications, you probably want to straighten this out. You can be held liable for the actions of your partners.) On the other hand, if your contract with Bob explicitly makes you a contractor and not a partner, then Bob should probably be issuing a 1099 to you. Similarly for you and Joe -- if your contract with Joe makes him a subcontractor, then you may need to get an EIN and issue him a 1099 at the end of the year. The money you pay to Joe is a business expense, and would be deducted from the profits you show on your Schedule C. In my opinion, it would be worth the $200 fee paid to a good CPA to make sure you get this right. You are correct that you do not need to file under a certain circumstances primarily related to income, but other items are taken into account such as filing status, whether the amount was earned or unearned income (interest, dividends, etc.) and a few other special situations which probably don't apply to you.  If you go through table 2 on page 3 and 4 of IRS publication 501 (attached), there is a worksheet to fill out that will give you the definitive answer.   As far as the 1099 goes, that is to be filed by the person who paid you.  How you were paid (i.e., cash, check, etc., makes no difference).  You don't have a filing requirement for that form in this case. https://www.irs.gov/pub/irs-pdf/p501.pdf Another thing to consider, however, is the deductibility of business expenses.  Let's assume that the employer can legitimately hire you as a 1099 contractor.  (Would you be able to telecommute? Would you have a high degree of control over when you worked and when you didn't?  These factors also affect whether you're a true independent 1099 contractor or not.)  As a legit 1099 contractor, you're able to deduct certain business expenses directly from your income. (You can find a list of the rules at irs.gov.)  As a W2 employee, by contrast, can deduct only business expenses that exceed 2% of the your AGI (adjusted gross income).  So, you also have to consider your personal circumstances in making the calculus and comparing whether a legitimate 1099 contractor job is or is not good for you.  It's not just a comparison of what they'd pay W2 employees versus what they'd pay 1099 contractors. How will your employer treat your pay and benefits status while you're on leave?   Disability income coverage and leave policies work in tandem to solve very different problems.  Disability income coverage covers your income, leave policies guarantee your status as an employee.   Typically, STD coverage requires an actual loss of income and will offset it's stated benefit for any income you're receiving.  In general you can't begin a STD claim after the 7 day waiting period and also draw income from vacation or sick time.  Also, typically STD will cover some percentage of your covered pay (sometimes including commission/bonus income) up to some weekly maximum. FLMA requires employers to allow certain amounts of time for certain types of leave.  FMLA is not necessarily an income replacement tool like STD coverage.   Contrary to your post it's my understanding that if sick and vacation time accrue in to a single PTO bucket your employer is prohibited from requiring employees to exhaust accrued time prior to beginning FMLA leave. In general, you're not missing anything because the point of FMLA is to guarantee your job and status as an employee from a benefits perspective. Benefits language from the Department of Labor Website A covered employer is required to maintain group health insurance coverage, including family coverage, for an employee on FMLA leave on the same terms as if the employee continued to work.