Both Employee and Self-employed

June,

I am starting a consulting biz but have an opportunity to work 20 hrs./week for a large company that requires I go through Manpower. I would be an employee of Manpower . The Manpower gig would most likely only last 3-6 months. It would be worthwhile for me to take it.

My question is, how much of my annual income must be directly paid to me as a self-employed vs. how much through an employer like Manpower, in order for me to deduct expenses from my consulting biz income ? And what if I still don't have income from my consulting biz by the end of the year?

Thanks! -Ann, Los Gatos, CA


Ann, you are asking me if you can be both an employee and a self-employed at the same time. Yes, you can.

I think you are also asking me if you need to make a certain amount of money before you can consider yourself a self-employed or before you can deduct business expenses. No, there is no amount you must earn. There is no income minimum nor maximum required from either your Manpower or of your consulting.

Even if you make no money, if your goal is to make a profit, then you are self-employed.

You might want to read the post below, MID-YEAR SELF-EMPLOYMENT. It touches on the same question. I am sure that you will also find very helpful, Feature #8: I am a Business, on my site.

And, as always, read the book that can simplify your tax and financial life, AND save you money!
SELF-EMPLOYED TAX SOLUTIONS .

Good luck in you new venture!
June