Summary of a 1099 Contractor vs W2 Employee
After completing a detailed and thorough research over various sites and forums, I’ve come up with the following.
In general, 1099 Contractors tend to have more flexibility with their working hours and can also work for multiple clients at the same time. W2 employees tend to be more responsible for bill paying, filing them, and keeping a closer eye on all their taxes. They also have fewer benefits.
The difference between 1099 Contractors and W2 employees often comes down to their approach to their work. W2 employees think of their jobs as permanent jobs where they have to give their work undivided attention and time. They also feel the need to complete the work assigned to them to the best of their abilities.
1099 Contractors work as hard as they have to to finish the work on hand and avoid the tasks given to them that they are completely uninterested in or find too challenging to complete. The main advantage of 1099 Contractors is that they can charge their clients for the time and energy spent on their job. They can even take advantage of additional time spent on other activities to earn money working at other jobs.
1099 vs W2 Workers: The Differences
Employees with 1099 status are independent contractors and are not treated as employees for tax purposes. As an independent contractor, a 1099 worker is not eligible for benefits, reimbursements, and you do not need to pay Social Security, taxes, or worker’s compensation.
If you have ever worked freelance or had a contract company managing your social media presence, you have likely interacted with at least one 1099 professional. This is the most common type of contractor that you will see.
While 1099 contractors have their benefits, they also come with a cost. Namely, 1099 contractors are responsible for all payroll tax and fines related to their payroll. Without a W-2, they have to track and report their income