When you hear terms like W2 or 1099, your mind immediately goes to tax season, right?
But these words mean more than just tax forms that you receive at the end of the year.
In fact, one of the biggest decisions we make throughout our career is the choice to be either a W2 employee or a 1099 independent contractor. Sometimes, we may even change from an employee to an independent contractor or vice versa.
Regardless of your role, it’s important to set up expectations of who you are, what you do and what your boundaries are from the beginning.
For instance, understanding the difference between a W2 and 1099 is crucial as you determine what to include in your contracts with clients, especially when you want to be clear about who you are, what you are to them, what your working relationship is, how you maintain control and what the expectations are for each of you.
Whether you’re an employee or an independent contractor, too often, control can feel like a luxury for only a select few.
REALITY CHECK: You don’t have to be everything to everybody. Even if you’re an employee.
Even if you are an employee and provide a specific service to your employer, you actually might have more control than you think you do.
The same is true for 1099s – just because you are doing work for someone else does not make you an employee, or the person hiring you as an independent contractor your employer.
If you need additional resources or information on W2s, 1099s and other tax information, the IRS and Small Business Administration websites are great places to start. But getting the information is one thing, applying it is another. This is what I do each and every day – help people decide what path is right for them.
Ultimately, implementing information in a way that works for you is what matters. I’d love to help you figure that out!
As you go about your day, think about these questions:
- What is my role?
- Where do I have control?
- Where can I have control?
- Where can I reset expectations?
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