Diana, do you think that on average most people who get paid a 1099 in the US will make more money than people who are just employees? Will a self employed truck driver make more money than an employee bricklayer who is just an employee? In the US, how many people who do a 1099 at tax season don’t have employees under them? What kind of self employed have employees and do a 1099 and vice versa?
-Rosenberg, Texas Reader
People who are working contract and file an IRS-1099 Tax Form pay more in taxes than a person who is an employee.
The employer portion of payroll taxes includes the following: Social Security taxes (6.2 percent up to the annual maximum,) Medicare taxes (1.45 percent of wages,) Federal unemployment taxes (FUTA). The self-employed person who receives a 1099 Tax Form must personally pay those taxes on a quarterly basis.
Even though they will more than likely receive more per hour than an actual employee, that evens out when employment taxes are taken into consideration. Most self-employed workers do not have employees, but if they do, those people would also file a 1099.
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