Understanding the difference between 1099 contractor and W-2 Employee
1099 and W-2 employees are two different classifications of workers in the United States. The main difference between the two is how they are taxed and how they are classified by the employer.
1099 employees, also known as independent contractors, are not considered employees by the company that hires them. Instead, they are considered self-employed individuals who provide services to the company. As a result, the company is not responsible for withholding taxes or paying Social Security and Medicare taxes on their behalf. 1099 employees are responsible for paying their own taxes, as well as providing their own benefits such as health insurance.
W-2 employees, on the other hand, are considered employees of the company that hires them. The company is responsible for withholding taxes and paying Social Security and Medicare taxes on their behalf. W-2 employees are eligible for benefits such as health insurance, paid time off, and retirement benefits.
In summary, the main difference between 1099 and W-2 employees is their tax and benefit status. 1099 employees are considered self-employed and are responsible for paying their own taxes and benefits, while W-2 employees are considered employees and have taxes and benefits provided by the company.
This is not meant to be tax advice, you should consult with a lawyer or a certified public accountant (CPA) for individual tax advice.