Accounting/Tax questions about income?

uming that this is your typical business-to-business contractual agreement, you bill him monthly for your services (or however often the contract stipulates that payment will be made). Whatever "option" might mitigate your tax liability is irrelevant. (And frankly, the extra $23,000 or so per year that he'd be paying in payroll taxes would likely attract some rather colorful descriptions as to what you should do with your W-2 "idea.")