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I've been an employee, an "outside sales representative" with a company for many years. I was on steady salary, had no benefits, and and no pension arrangement. I paid taxes with a W-2 form, and took business expenses deductibles.
Unfortunately, I never brought in the amount of sales to deserve the salary I was getting, based upon what the formula is for commission. Now the company is giving me a major cut in salary, and telling me to become an independent contracter, and to apply for an LLC. My relationship with the company has been and continues to be very good. They are doing this to keep afloat.
My questions are,
(a) Is there any financial benefit to me with this new arrangemet over the old one? Will my taxes skyrocket?
(b) Does this new arrangement necessarily entail that I would be filling out a 1099 rather than a W-2?
(b) Is there an option under this arrangement, and would it be beneficial to me, to continue getting a W-2 for the salary, and a 1099 for any deserved commissions above that salary?