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5 Answers

which is better, w2 or 1099?

Asked by: emeka22uche 760 views YA Discussion

i am a caregiver working part time under an agency. the payroll choices are w2 and 1099. with w2 they are willing to pay me 110/day. On the other hand, with 1099 they are willing to pay me 120/day.
in regards with compensation, its a bit crappy because there is no medical or dental insurance. its just an insurance the agency will cover if any injury will happen at work (which unlikely to happen). Additional information(if it helps): i am single, independent, and a residence of chicago.
SHOULD I BE ON W2 OR 1099?

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5 Answers



  1. Edgscrtd on Apr 18, 2012 Reply

    w2

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  2. KD on Apr 18, 2012 Reply

    I would definitely go with the W-2. With a 1099, you’re considered to be “self employed” and you don’t pay any taxes throughout the year. You make a little more during the year, but once you go to file your taxes next April, you will have to pay tax on whatever income is on your 1099. I did it once, and I ended up having to pay over $ 700 out of my own pocket all at once. I think it’s better to let the company take a little every week.

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  3. Anon on Apr 18, 2012 Reply

    I always prefer 1099 work but there are caveats.
    With a 1099, you will need to pay quarterly taxes to the IRS or get hit with a penalty. You are also responsible for more taxes. You are probably accustomed to seeing FICA and medicare being taken out of your check; 6.2 and 1.45% respectively. What you don’t see, your employer is also paying that percentage as well. So in reality, the rates are 12.4 and 2.9%. On a 1099, you are not paying 6.2 and 1.45%, you are paying 12.4 and 2.9%. So that $ 10 difference now comes $ 0.82 after taxes and then you need to make sure you set aside federal tax, FICA, Medicare, etc. (plus state taxes if applicable) and make sure you pay them on time every quarter or get hit by the man. So, you will need to see if $ 0.82 is really worth it everyday to deal with it.

    IMO, I would go with W2 and let them deal with the taxes as you really are not going to come out ahead for the additional hassle for 1099 basis.

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  4. monhegan on Apr 18, 2012 Reply

    1099 they treat you as independent contractor. You take on all liability yourself if you do this. Any accident or harm you might cause is all on you.
    W2 you are an employee, an agent of them. They have to take liability for your actions.

    If you have your own insurance it will cost $ 1000 or more and will still have a deductible.

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  5. punkin on Apr 18, 2012 Reply

    In order to correctly answer your question, you have to calculate your income for the year and tax liability in both scenarios. It is however safe to assume that the employer has already done this calculation and is hoping you opt for 1099 so that they are not liable for employment taxes, but I would still do the specific calculation for your situation to be sure, it’s possible you could negotiate for more money under the 1099 scenario.

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