Home Improvement Contractor - Licensed Contractors

What's the difference between employed and independent contractor?

Besides from the fact that I get a W-2 form from being employed and a 1099 from being an independent contractor, what 's the difference between them? Benefits and disadvantages? Thanks for your input!

Public Comments

1. Independent contractors are hired to do work for a person or company, but get none of the company benefits, if there are any to be had.
2. As an independent contractor you get paid based on commissions or wages you earn for sales or work of a company... but you do not share in an company benefits, health care plan, bonuses, etc.. The great thing about it is the fact that you get all your money up front, but the bad thing about it is all expenses, taxes, health care, etc... fall on you. As an employee, the company you work for deduct the taxes you owe on earnings, share in paying the social security, medicaid, etc... Plus the company shares in other expenses such as health care plans, savings plan, provide you with paid vacations, bonuses, etc..
3. The essential difference between an Independent Contractor ("IC")and an Employee is that as an IC you are a small business. As an IC you generally have no benefits, company sponsored 401(k), company sponsored retirement plans etc. You receive you pay GROSS and you are responsible for taxes, retirement planning and saving, paying for your own health insurance etc. But these expenses are deductible against you income as business expenses. As an employee, the company withholds taxes, sometimes provides benefits, retirement plans etc. As an employee you live the simple life but you are dependent on the company for your income. As an IC you set your hours and work as hard as you want to grow or shrink your income as you see fit. It goes on and on... lots of differences/advantages/disadvantages. I hope this is helpful.