PAYROLL
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W-2
>> Employer – Employee relationship..
>> Subjected to State or Federal tax deductions.
>> 401(K) employee deductions
>> Medicare and Social Security (15.30%)
>> Obtain W-4 from employees
1099
>> Issued for Independent Contractors.
>> No deductions.
>> Form 1099 issued at the end of the year.
>> Not eligible for unemployment benefits
The factors that decide this
How much control Employee have over the work you do.
>> Employee have more control → contractor
>> Employee have less control → employee
Whether or not Employee free to seek out additional work in the same field on the side.
>> Employee can have side gigs → contractor
>> Employee can’t (unless you get special permission) → employee.
