In the last few years, many more people have seen the appeal of working from home. However, not as many people know how to go about doing this.
Many people first experienced working from home because of social distancing policies. But, many others want a way to make a living at home outside of their current job.
If you’re one of those people, you may have heard of a 1099 contractor. These individuals often work remotely, making their living from anywhere they please.
These contractors receive several advantages from their work. Yet, they also lose some advantages that more traditional employees receive.
We’ll give a concise definition of what these workers do and how they differ from traditional employees. So, without further ado, let’s jump right in!
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Differences Between a 1099 Contractor and Employee
When people refer to an independent contractor 1099, they distinguish this worker from traditional employees. Traditional workers become hired by a specific company to work as employees.
These employees receive several advantages from this work. Usually, these include a salary and benefits. When they file their taxes, they do so using a W-2 form.
In contrast, contractors are technically businesses that a company may outsource its work to. This work often includes tasks like copywriting and photography.
As such, the contractor technically remains self-employed. This individual doesn’t have “bosses” so much as “clients.” These workers also file a contractor 1099 form for their taxes instead of a W-2.
Categories of 1099 Contractor
Contractors don’t all do the same kind of work. Instead, experts distinguish between three different types of contractors. These three include:
- Freelancers
- Gig workers
- Crowd workers
Freelancers are those who earn money the job, task, or hour. Usually, this work occurs over a short-term period. Most freelancers work with several clients, unless a company contracts them to work exclusively for them.
Gig workers perform other types of work, usually through apps or platforms. For example, Uber, Grub Hub, and Instacart workers would fall under the gig worker category. These people would also fill out a 1099 for their earnings in this work.
Crowd workers are the last of these three. Sometimes people refer to this as crowdsourcing or platform work.
In short, crowd work outsources work to a pool of online workers through an online platform. This practice contrasts with using a single contractor or employee to do this work.
Do You Qualify as a 1099 Contractor?
Depending on what work you do, you may wonder if you need to fill out a 1099 form. If so, ask yourself these questions.
First, does the paying company control your schedule or how you do your job? Second, does the company control how you receive payment or equipment and supplies?
Finally, do you have a written contract you can reference? If so, the terms of the document should specify your role. You can learn more about this here.
Start Your 1099 Contractor Work
Becoming a 1099 contractor offers increased freedom and independence. In doing so, it allows you to become your own boss.
Fortunately, you can take several types of work to start as a contractor. Whether you’d prefer freelance writing or Uber driving, you can take control of your work life. So, start looking for your new work opportunity today!
We hope you enjoyed this article! If so, check out our other career pieces today.
