Beyond DACA

A discussion on being self-employed

By Oliver Lopez, PhD

The mother of innovation

La Necesidad
 The Facts
I had… I needed…
• Education • Mode of transportation
• Skill/Craft • Patience
• Potential Clients • Learn the “rules”
• Ganas • Use the “rules”
• Coraje • … to just do it
 My Gig-Economy
• Personal tutor
• Ca$h
• Program manager for a small non-profit
• Stipend (almost same as ca$h)
• Statistical consulting
• By contract for a specific project

I PAID TAXES
 When you are an “employee”
• Requires legal permission to work in the US
• Requires a valid SSN
• Have legal protections as an employee
• Federal and state laws for minimum wage
• Hiring and firing process
• Paid time off
• Benefits
• Some taxes are withheld from your check every cycle
 When you are not an “employee”
• Working for ca$h or consulting (contractor)
• Provide a service
• As simple as tutoring, cleaning services, etc.
• As complicated as legal consulting or statistical consulting
• In MOST cases this does NOT require a SSN
• No taxes are withheld from your income
 The Cost of Government
• For employees, taxes are withheld every pay period
• Federal Income Tax
• State Income Tax
• Social Security
• Medicare
• State Disability Insurance (SDI) in CA
• For non-employees, these taxes are still owed but they are not withheld from
your income
 Employee or not…
• You still need to pay taxes
• Employees receive a W2
• Contractors receive a 1099
• Working for ca$h, you are responsible for keeping track of your income
 Ca$h vs Contractor

Ca$h Contractor (consultant)

• Loose terms of work and expected pay
• No tax forms expected from the entity
that hired you
• Keep track of your business related
expenses
• No SSN required (as long as they don’t
ask)
• Can involve a contract detailing scope
of work and pay
• The entity provides you a 1099 Form
that indicates how much you earned
• Keep track of your business related
expenses
• SSN or TIN mostly likely required
 Ca$h vs Contractor

Ca$h Contractor (consultant)

• Loose terms of work and expected pay
• No tax forms expected from the entity
that hired you
• Keep track of your business related
expenses
• No SSN required (as long as they don’t
ask)
• Can involve a contract detailing scope
of work and pay
• The entity provides you a 1099 Form
that indicates how much you earned
• Keep track of your business-related
expenses
• SSN or TIN mostly likely required
Changing Landscape – AB 5
Changing Landscape – SB 1159
 Changing Landscape – SB 1159

https://www.dca.ca.gov/consumers/wll.shtml
 Changing Landscape – AB 60
• Can obtain a driver’s license regardless of status
 Changing Landscape – AB 2184
• You don’t have to have a SSN
 Death and Taxes
• You are expected to pay taxes on your income: No SSN? No problem
• ITIN – Individual Tax Identification Number
 ITIN
• An ITIN
• Does not replace a SSN
• Does not grant permission to work legally as an “employee”

• Apply here: https://www.irs.gov/pub/irs-pdf/fw7.pdf

• Never pay for forms from IRS.GOV
 Step Up Your Game – Get a Business License

• Using your SSN or ITIN you can apply for a business license from the city
you do business in
• You get a paper license to post – permission from the city to do what you do
• You pay your city taxes at the time you apply based on how much you expect to make
• You can give your “company” a fictitious name or a DBA (doing business as)
• LEAP Tutoring
• Wachusay Translating Services
• You can organize your business in one of many legal ways (e.g LLC, Inc, etc)
 City of Orange Business License
• Business License is all about taxes
• What you need
• A CA driver’s license (other forms of ID need approval from supervisor)
• Valid SSN or ITIN (card not needed)
• Estimate of your earnings
• Any other license required to perform your service
• Some services require much more (hair salon, restaurant, etc.)
• Seller’s permit: Dept. of Tax and Fee Admin
 Step up your game

Be professional in every way

 Step Up Your Game – Organize Your $
• With a business license and DBA, you can open a business account
• You can open a line of credit (if you really need it)
• Use software to manage your expenses and income
• Mint.com
• Excel
• Find a tax preparer you can trust and learn as much as you can
 But this is too much info…
• You are prepared to handle this
• You handle more stressful situations already
• You can innovate
• You can put to practice your education, degrees, certifications, etc.
• This doesn’t have to be plan B – make it Plan A-Z
• https://immigrantsrising.org/resources/
How do I choose how to work?

c'est compliqué
Oliver Lopez, PhD
Chapman University
olopez@chapman.edu