My new job said they pay 1099 and asked if i’m ok with that. I have no idea what that means or the difference it makes. From what i’ve read it seems like I will have to pay everything back during tax season? I’m so confused. This is a receptionist job paying hourly wage. Please explain
In: Economics
It means that you are a contractor rather than a full time employee.
There are _many_ differences between the two. The most impactful for you will be that you will be ineligable for benefits (health insurance, 401k, etc.) and the company **will not** withhold estimated taxes from your check; you will be expected to do that yourself and make estimated tax payments at least quarterly (maybe more frequently depending on your location). Failure to make those payments can get you in trouble with the IRS and local taxing authorities.
Ideally, you’d prefer to be a W2 employee over a contractor. Moreover, it is _unlikely_ that this is actually a 1099 position. Companies often try to have W2 employees classified as 1099 contractors (as it is less expensive for them) but the rules around which category an employee falls into are very strict. If the company requires you to come to the office, gives you set hours, and directs your individual assignments, you are **not** a 1099 contractor.
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