What’s the difference between W-2 and 1099?
Short Answer: W-2 workers are employees; 1099 workers are independent contractors.
Employees typically have taxes withheld and follow company-controlled schedules and processes. Contractors generally control how they do the work and handle their own taxes.
Common mistakes:
• Treating full-time staff as contractors
• Paying contractors like employees
• No written agreement
What we recommend: Classify correctly, misclassification can create major tax and compliance problems.
Still have questions?
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