1099 vs. Regular Employee
By Ask Diana Posted 09-08-2018

Q:

 

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

 

A:

 

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.

 

If you have any questions about interviewing, hiring, or work, I’d love to hear from you. Due to the volume of response, not every question will
appear in the column, but most questions will receive an email response within 2 to 3 days. Have a question for Diana? Email: askdiana@jobsparx.com