“I currently have a full-time W-2 job, that makes approximately $125k/year. Additionally I freelance, and bring in an additional $20k-30k/year, which I am issued a 1099 (or multiple 1099's) for. My question is simple. What would you recommend that I do for my taxes?”--->As you can see, basically, since you are self-employed, an IC getting 1099MISC, and you also earn wages or salary on W2 from employment, your Social Security and Medicare eligibility and total self-employment tax is affected. For example, as an IC, you need to pay self-employment tax (SECA) to the Social Security Administration for Social Security and Medicare, based on your net earnings from your business, You pay this tax at the same rate as employers and employees (13.3% total for 2011 and 12.2% n 2012, I guess),then you are also subject to FICA taxes on your employment income on W2.However, The Social Security Administration considers the tax on your employment first, then your earnings from self-employment. So,if your gross inceo from employment is $30,000, then the whole $30,000 is subject to FICA taxes and $76,800 of $125,000(your SE income) ‘d be subject to FICA taxes. $48,200 of the $125,000 SE income would not have the Social Security tax amount deducted. But, you would still be required to pay the Medicare tax on the full amount of your earnings from employment and self-employment.
“ Do I just handle my taxes like normal, declaring both the W-2 and 1099(s), or should I look into an S corp or LLC for my 1099 income? My case might be very simple, but I honestly do not have the experience so I need someone to guide me.”--->You are still subject to FICA taxes as said above; I guess it is really hard to tell; it depends. Basically, Corporations and sole proprietors differ in the legal and tax structure of the business. The individual and the business are one entity in a sole proprietor business. When filing personal income tax, sole proprietors use Schedule C to list the income and the expenses of the business. The net gain or loss is shown on the 1040 line 12, categorized as income. A sole proprietor is legally and individually responsible for all aspects of the business. Yu are at risk for all business and personal assets. S corporations pass corporate income, losses, deductions and credits to their shareholders for federal tax purposes. The owners, or shareholders, in the S corporation, report the income and losses on their personal income tax returns. There are qualifiers to elect an S corporation status. The S corporation must be a domestic corporation and may not include partnerships, other corporations .A sub-chapter S corporation affords a sole proprietor the legal protection of a corporation. This type of corporation also allows the individual owners to show a loss on their 1040 income tax return.As said above,sole proprietors have unlimited legal liability for their business. Under the law, the business and the individual are the same. It is important for the individual sole proprietor to maintain business insurance to protect himself and his business.Corporations limit the exposure of the individual owners and stockholders. Under the law, the liability is limited to the business only. S corporations and limited liability companies are legal entities that afford protection to the sole proprietor.
“ If you were in my shoes, what would you do?”---> Unless you are very familiar with corporate tax law including LLC(SMLLC ort MMLLC) in your state, you'll probably want to consult a lawyer or CPA for professional(including legal and acounting) help/advice in your local area before incorporating your company.