Hey everyone,
I just moved to the US a few months ago and have been working as a medical assistant for $17 an hour under a W-2 (since taxes are already taken out of my paycheck). I got offered a new job at $15.50 an hour for 150 hours a month, and I was excited because it’s remote. But then I found out it’s a W9 position.
Can someone explain what that means? Do I end up paying more taxes with a W9?
Yes, with a W9 job, you’ll owe more in payroll taxes since you’re considered self-employed.
Kiran said:
Yes, with a W9 job, you’ll owe more in payroll taxes since you’re considered self-employed.
Do you know how I can figure out exactly how much I’ll owe?
Kiran said:
Yes, with a W9 job, you’ll owe more in payroll taxes since you’re considered self-employed.
You can offset some of the extra taxes by deducting business expenses.
Kiran said:
Yes, with a W9 job, you’ll owe more in payroll taxes since you’re considered self-employed.
You can offset some of the extra taxes by deducting business expenses.
What counts as business expenses? Sorry, I’m still learning all this.
@Abi
It’s stuff you need to do your job, like work-related tools, part of your rent if you work from home, internet costs, or equipment. Do you have anything like that?
Zaren said:
@Abi
It’s stuff you need to do your job, like work-related tools, part of your rent if you work from home, internet costs, or equipment. Do you have anything like that?
Just a heads-up, commuting expenses aren’t considered business expenses.
Zaren said:
@Abi
It’s stuff you need to do your job, like work-related tools, part of your rent if you work from home, internet costs, or equipment. Do you have anything like that?
Not really. I just pay rent, and I’ll be doing this remote job from my room for now.
Kiran said:
Yes, with a W9 job, you’ll owe more in payroll taxes since you’re considered self-employed.
You can offset some of the extra taxes by deducting business expenses.
That’s true, but having business expenses also reduces your net income.
With a W9 (or 1099), you pay self-employment taxes, which are about 7.65% higher than what you’d pay as a W-2 employee. But you can also deduct things like rent and utilities if you have a home office. In some cases, after deductions, you might pay less in taxes overall. It depends on your expenses.
Abi said:
@Harley
Would this mean I’d get a bigger tax return?
Not really. You’d actually need to make quarterly tax payments because taxes aren’t withheld automatically like with a W-2 job. If your expenses are minimal, you might actually take home less with the W9 position. But working remotely could save you money and time compared to commuting.
First, check your work permit. Can you be self-employed, or do you need an employer to sponsor you?
Second, think about how many hours you’re working now. That 150 hours per month is about 34 hours a week. Are you working more or less than that with your current W-2 job? Also, why are you considering a lower-paying position?
For taxes, W9 (1099) income looks like more money upfront because nothing is withheld. But you’ll need to pay taxes on your own. Based on what you said, your business expenses might be pretty small—maybe part of your rent, internet, or electricity costs. So, in the end, it might not be worth the lower pay and higher taxes.
@Arlo
My work permit allows me to be self-employed. Right now, I’m working about 135 hours a month. I’m interested in the new job because my current one is 1.15 hours away, so I spend almost 2.5 hours a day just commuting, plus gas and other small expenses. The new role is more data-related, which is new for me and sounds interesting. But I don’t want to make a decision without getting other opinions. I’m here alone, so it’s really tough to figure this out.
@Abi
Got it. So here’s a breakdown:
For your W-2 job, you’d make about $27,540 a year. For the W9 job, it’s $27,900. But after taxes:
| W-2 | W9 | |
|---|---|---|
| Net Income | $22,786 | $21,879 |
So with the W9, you’d actually take home $907 less, even though the hourly rate seems similar.
@Arlo
Would it be much different if I filed taxes as married but filing separately and lived in Wisconsin? Also, I have a Social Security number—does that change anything? Just realized I’d be working 15 more hours a month for the same pay. Do W9 jobs ever give tax refunds?
@Abi
My bad—I thought you were in Hawaii based on something earlier.
For Wisconsin, the taxes would be lower than Hawaii’s, but the difference between W-2 and W9 income stays about the same—roughly $850 less for the W9 job. Social Security (SS) is just a part of the taxes you’d need to pay. And no, W9 jobs don’t give tax refunds. You’ll get a 1099 form from the company, and it’s your job to report that income on your tax return.
