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Thread: W2 vs 1099

  1. #1

    W2 vs 1099

    ive been contracted out to a company for about five months and im having a hard time deciding if i should use 1099 or w2 for my taxes. ive had this discussion with many people and just wanted to get some opinions on, in the long run, which would probably work out better? what do you guys think, if you're at a company for that long, is it wiser to use w2 or 1099, and why would u choose the one you would.

  2. #2
    My Dad is a really experienced accountant. He uses Sage which I don't know if it's rubbish or not. I'm assuming it's decent though cause he does a lot of complicated stuff and says that it does everything he needs.

  3. #3
    those aren't programs, those are forms that you file to the IRS. 1099 is for independent contractors and w2 is for employees.

  4. #4
    Well of you go 1099, you need to make sure you set aside enough money to pay the taxes at the end of the year. The good thin with it is you usually can make more money...even after taxes. So a W2 employee makes $10 an hour and a 1099 makes $15 and pays $4 in taxes so they really make $11. Now, if the company has benefits, you might want to go W2 if you want those benifits. I would find out from the company the diference in hourly rate and any benefits before making a decision.
    I drink to make other people more interesting!
    http://www.monsterlizard.com

    'One Google under Google, for which it stands.' -- Brian Lent

  5. #5
    no, the hourly rate would stay the same. see the problem is i dont knwo the tax difference in deductions, so in the long run i dont know which one would come out to be more. and i don't have any benefits.

  6. #6
    If the hourly rate is the same, I would go W2 just for simplicity.
    I drink to make other people more interesting!
    http://www.monsterlizard.com

    'One Google under Google, for which it stands.' -- Brian Lent

  7. #7
    what kind of difference moneywise would that be if im not worried about simplicity?

  8. #8
    It will be the same money if they are offering you the same hourly rate. Either way you have to pay the same amount of taxes. Now, if you go 1099, you are saving THEM from having to match your FICA (social security). So, really only they benifit, that is why it is strange that they are offering you the same hourly. They should take into account that they won't have to pay FICA. Also, if you go W2 and something happens and they fire you, you can get unemployment. Not the case if you are 1099.
    I drink to make other people more interesting!
    http://www.monsterlizard.com

    'One Google under Google, for which it stands.' -- Brian Lent

  9. #9
    thanks a lot blindlizard, greatly appreciated.

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