Whether you're classified as an independent contractor (1099) or a W-2 employee depends on a range of factors set by federal, state, and local laws. Wripple's employer of record will review your information to make the appropriate worker classification determination. Here's a simplified breakdown:
1099 (Independent Contractor):
You’re typically classified as 1099 if you operate like a business. This means you have control over how, when, and where you work. You’re responsible for managing your own taxes.
Key factors that inform a 1099 classification include:
Have you established an LLC for your freelance business?
Do you have a professional website or other materials to market your services as an independent freelancer?
Are you currently working with, or do you plan to work with, multiple clients simultaneously?
Do you use your own equipment, tools, and methodologies to deliver your work?
Do you typically work independently, without needing frequent oversight from clients?
W-2 (Employee):
You’re usually classified as a W2 employee if you're integrated into a team and have less control over your work conditions. In this case, the hiring organization withholds income tax, Social Security, and Medicare on your behalf.
To completely understand what being engaged as a 1099 vs. W-2 means for your specific situation, it’s always a good idea to consult a CPA.