Comparing Value of IC and Employee Jobs. Valuation of Benefits

[epiepishockMD]

Does anyone have any suggestions on how to estimate the value of insurance, and other benefits for the purpose of comparing the total value ofa employee jobs with benefits vs an IC job with none

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[RustedFox]

22.50 an hour.

 

[epiepishockMD]

22.50 an hour.

?

 

[shoal007]

Does anyone have any suggestions on how to estimate the value of insurance, and other benefits for the purpose of comparing the total value ofa employee jobs with benefits vs an IC job with none

Depends on the benefits. I pay $1000/year for family health coverage (high deductible) which my employers states cost them 21,000. I also get disability, life insurance, pension and 403b match.
All in all, I'd estimate my benefits at $40-50k/yr. Pretty close to the 22.50/hr. But these are pre-taxed benefits...

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[goodoldalky]

Does anyone have any suggestions on how to estimate the value of insurance, and other benefits for the purpose of comparing the total value ofa employee jobs with benefits vs an IC job with none

This is easy to calculate, in order to do so you need to specify what exactly the benefits are you are getting and how many hours per year you must work to acquire those benefits.

 

[epiepishockMD]

This is easy to calculate, in order to do so you need to specify what exactly the benefits are you are getting and how many hours per year you must work to acquire those benefits.

Retirement and such has a little bit more transparency. But how do I reliably figure out how much a health insurance plan is worth?

 

[EctopicFetus]

You can look at the exchange and see what they cost. I imagine you can look at non qualified plans and get an idea of what a plan would be worth to you.

If your employer is giving you a 30k health insurance plan but you are young and healthy it isn’t really worth that to you.

In general for a HSA plan for a party of 5 you are probably in the $1,100-$1,500 range per month.

For me in lieu of a low deductible plan I would rather an HSA plan. Thats worth more to me.

 

[GeneralVeers]

HSA plans aren't a good value any more. When I first had one it was $180/month for an HSA plan, which was about $100 cheaper than a Silver plan. Now it's only about $50 difference, so not worth it in my state.

I value employee benefits at $30/hour.

 

[The White Coat Investor]

You can really calculate it out benefit by benefit (which is what I'd do if I were comparing two jobs.) Or you can use my handy dandy EM IC vs employee rule of thumb-You need to be paid at least 10% more as an IC.

 

[NYEMMED]

Can you/ would you/ should you claim a vehicle as a company car as an IC? The car payments would be a tax deduction and theoretically free in the long run then?

 

[BoardingDoc]

Can you/ would you/ should you claim a vehicle as a company car as an IC? The car payments would be a tax deduction and theoretically free in the long run then?

1: the car wouldn't be free. That isn't how tax deductions work. You deduct the amount in question from your taxable income. Let's say you're in a 25% marginal bracket. You deduct 1000 bucks for a business expense. This means you pay $250 less in taxes that year. You're still 750 out of pocket at the end of the year as a result. Yes, that makes your business expenses cheaper, but they aren't free.
2: unless you are using the car only for work (and can prove it) this seems like a bad idea unless you really want to keep a mileage log of all your work and personal driving and then calculate the value of that fringe benefit each year.

 

[NYEMMED]

1: the car wouldn't be free. That isn't how tax deductions work. You deduct the amount in question from your taxable income. Let's say you're in a 25% marginal bracket. You deduct 1000 bucks for a business expense. This means you pay $250 less in taxes that year. You're still 750 out of pocket at the end of the year as a result. Yes, that makes your business expenses cheaper, but they aren't free.
2: unless you are using the car only for work (and can prove it) this seems like a bad idea unless you really want to keep a mileage log of all your work and personal driving and then calculate the value of that fringe benefit each year.

Got ya. So not really practical in real life. Trying to figure out good and smart deductions for IC

 

[hundreddaysoff]

Got ya. So not really practical in real life. Trying to figure out good and smart deductions for IC

Biggest ones that I know of are (1) medical licensing fees and (2) payroll tax if you're an S-corp.

 

[miacomet]

Biggest ones that I know of are (1) medical licensing fees and (2) payroll tax if you're an S-corp.

With the new tax code, becoming an IC is even more advantageous; you can't deduct any work expenses from a W2 job anymore, and even as a physician, you may qualify for at least a part of the 20% pass-through deduction on the first 157k (single)/314k(married) of income. Other deductions include the higher amount you can contribute to an individual 401k and also your health insurance premiums.

Agreed benefits are worth about $20-30 an hour, but I also think that value has dropped with the new tax code.

 

[GonnaBeADoc2222]

Got ya. So not really practical in real life. Trying to figure out good and smart deductions for IC

Max out that one participant 401k.

Health insurance premiums (potentially).

If traveling:
-Hotel
-Rental Car
-Gasoline
-Tolls

Be careful not to deduct disability insurance premiums.