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.
Dive deeper.
1099 or W-2? Which one actually applies?
In this clip from Episode 4 of the Planting Seeds Podcast, we break down the difference and why worker classification matters more than simply choosing the option that feels easiest.
If you work with contractors, employees, or you're getting ready to hire, this is one conversation worth hearing.
Still have questions?
If you’re not sure what applies to your situation, we can help.