I'm being offered a job and have been asked if I wanted to be 1099, W-2 or employment contract? Whats best?

I am being offered a position and have been asked how I would prefer to be paid. They gave me the options of 1099 or W-2 and also an employment contract for a period of time. Not sure which would be best and what I should go for. Any ideas?

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3 Responses to “I'm being offered a job and have been asked if I wanted to be 1099, W-2 or employment contract? Whats best?”

  1. Iris Says:

    My first question is, are you REALLY a contractor? The laws around this are extremely tight and the government is looking for companies which are "using" employees by calling them contractors. Typically a contractor does a 1099.

    Be careful. Are you a contractor? Following is some information to help you answer that question:

    Instructions the business gives the worker: An employee is generally subject to the business’ instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work:
    When and where to do the work
    What tools or equipment to use (and provide them)
    What workers to hire or to assist with the work
    Where to purchase supplies and services
    What work must be performed by a specified individual
    What order or sequence to follow

    The amount of instruction needed varies among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker’s performance or instead has given up that right.

    Training the business gives the worker: An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods.

    It is very important to be correct on which you are!

  2. mindcrime828 Says:

    1099 = You are an independent contractor and are responsible to remitting your own payroll taxes (income, FICA, FUTA, SUTA, etc).

    W-2 = You are an employee of the company. They will withhold taxes for you from your paycheck.

    Employment Contract = You are a contract employee, meaning your employment is set only for a certain length of time. The company may decide to issue you a 1099 or list you as an actual employee.

    Personally I would go as a regular employee (W-2).

  3. C. P. Says:

    Sounds kinda strange because there are very strict rules regarding whether employers can pay employees as Contract Labor – which means no taxes are held out when you are paid and they issue you a 1099 at the end of the year for you to file with your taxes. They avoid payroll taxes this way, and you do not have to pay Social Security or Medicare. BUT, no Federal Withholding is taken from your wages either, so you have to pay the taxes based on your income level when you file your taxes. I know based on the laws in Texas, an employee has to work completely independently, provide their own materials, and be free from supervision to qualify as a person that can be paid this way. For example, a company can pay someone as "Contract Labor" if they are hiring them to paint their building, and they are paying a specific amount for the job they do only – not depending on how many hours it takes, etc. I’d look deeper into this before deciding. Check into your state’s employment laws. I’d ALWAYS rather be paid in such a way that Federal Withholding is taken out (which I assume they are calling W-2 since that is what is issued to you at the end of the year) because I would worry about the amount I’d owe when it’s time to file my taxes! Plus, you do want to contribute to Social Security & Medicare.. that is if it’s still around when we all need to collect it!