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1099 Contractor vs. W-2 Employee:
First off, let’s see if contract work is even the right move for you.
If you have been on the fence about jumping into self-employment, it’s important to know what you are getting into. It’s not always easy!
While working from anywhere may sound nice, remember that you have to proactive. In most cases, jobs will not come to you. Instead, you have to go out and find them yourself – everything is completely self-motivated.
Be sure that your personality allows you to go with the flow. You will likely go long stints without work in the beginning, as you build out a book of business. The natural ebb and flows of freelancing can turn people away from this type of work.
If you are stressed easily and don’t have stash money to account for down months, I’d recommend finding a more steady paycheck through traditional employment!
It’s not all bad though! Being self- employed comes with its own freedom. If you want to create your own hours and have the ability to work from practically anywhere, then it might be for you! Below is a list of the pros and cons of each:
Self-Employed / 1099 Contractor:
- Make your own hours
- Self-motivated work; accept and decline jobs as you see fit
- Have many jobs/clients
- Supply your own tools, materials, and training
Employed / W-2:
- Usually have a structured schedule (e.g. 9 to 5, Monday thru Friday)
- Complete assigned tasks given to you by superiors/managers
- Have only one employer
- Supplied the necessary tools, materials, and training
Watch Out for Taxes:
If you’re an employee, you get a W-2.
If you’re an independent contractor, you get a 1099 form.
As a W-2 employee, taxes will automatically be deducted each paycheck. Though a little annoying, it will save you a lot of the hassle that comes during tax season.
But if you’re a contractor, you are responsible for calculating your own payroll taxes! You can use our handy self-employment calculator if you want to run some numbers or need some help!
Best Places To Start for Freelancers / Contractors: