topic Does it Matter if I am being W2ed vs. 1099ed? in Self employed

Does it Matter if I am being W2ed vs. 1099ed?

gambino_n1 — Wed, 27 Oct 2021 21:24:15 GMT

Hello,

I'm in financial consulting. I have a regular 9-5 consulting job through my firm and then recently, I picked up my own client on the side. I was able to pick this client through a recruiting firm so I am being paid via W2 instead of 1099. But this is my side consulting business on my own. I am not employed by my client. I am not employed by the recruiting firm that connected us. So I am an independent contractor - however, they refuse to pay me through 1099. Does it matter? I want to be able to deduct my business expenses relating to this client - health insurance premiums, cell phone, computer, co-working space, etc.

Re: Does it Matter if I am being W2ed vs. 1099ed?

VolvoGirl — Wed, 27 Oct 2021 21:28:46 GMT

Sorry if you are on a W2 you can not deduct expenses. Did you ask them why it's a W2? Usually employers want to pay on 1099NEC.

Re: Does it Matter if I am being W2ed vs. 1099ed?

HollyP — Wed, 27 Oct 2021 23:07:57 GMT

I agree with @VolvoGirl if you are classified as an employee and receiving a W-2 then you cannot deduct any business expenses. It is definitely worth a discussion with your client and referral agency. The IRS has some helpful information here that you will want to review as well.