I make $20 an hour and last year I was paid as a W2 employee with no benefits. Now my boss says I can switch to 1099 and get benefits like paid vacation, sick days, and holidays.
If I go with 1099, what expenses can I deduct to offset the higher taxes? Would this actually be a better deal for me?
You don’t get to pick whether you’re W2 or 1099. The IRS has rules for that.
Are you running your own business and working for multiple clients? Or do you just show up, work, and get paid? If it’s the second one, you’re an employee and should be W2.
@Ezri
I work full-time as a receptionist at a clinic. I thought it was weird they’d offer benefits with 1099 since that usually comes with W2. They also said I could open a company to deduct more expenses and lower my taxes.
This is my first job so I have no clue if this is normal or shady
The IRS decides if you’re W2 or 1099, not your boss. If they set your hours and give you paid time off, you should be W2. This offer doesn’t sound legit.
With W2, your employer pays half of your Social Security and Medicare taxes. If you go 1099, you pay the full 15.3% yourself. Those ‘benefits’ they’re offering aren’t really free—they’re just shifting costs onto you.
Make a spreadsheet and compare what you’d actually be taking home.
This isn’t really legal. A real 1099 contractor controls their own hours and doesn’t get paid time off. Your boss is probably trying to save money by misclassifying employees.
Self-employed people don’t get benefits like paid vacation or sick leave. If your boss is offering those, they either don’t understand the law or they’re trying to pull something shady.
Ali said: @Reagan
This might be a dumb question but… if I take 1099, could they just pay me for vacation days and mark it like I was working?
That would be labor misclassification. The only way they could do something like that is if they let you hire a subcontractor to cover your work. But if they don’t allow that, then yeah, it’s sketchy.