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korymaine
New Member

In 2018 I was laid off from my employer, but continued to freelance with them. My 1099 was taxed at a W2 rate vs 1099. Same for 2019 but I do not see the tax break. Help?

 
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DawnC
Employee Tax Expert

In 2018 I was laid off from my employer, but continued to freelance with them. My 1099 was taxed at a W2 rate vs 1099. Same for 2019 but I do not see the tax break. Help?

You are either an employee who receives a W-2 or you are a freelancer (self-employed) who receives a 1099.   Your income tax rate is the same, the difference is your social security and medicare taxes.  As an employee, you pay half and your employer pays the other half.  As a self-employed freelancer, you are both the employer and employee, so you pay all of it (15.3%).   You actually pay more tax as a self-employed person, but you can deduct expenses from your income which will help to lower those taxes.  

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1 Reply
DawnC
Employee Tax Expert

In 2018 I was laid off from my employer, but continued to freelance with them. My 1099 was taxed at a W2 rate vs 1099. Same for 2019 but I do not see the tax break. Help?

You are either an employee who receives a W-2 or you are a freelancer (self-employed) who receives a 1099.   Your income tax rate is the same, the difference is your social security and medicare taxes.  As an employee, you pay half and your employer pays the other half.  As a self-employed freelancer, you are both the employer and employee, so you pay all of it (15.3%).   You actually pay more tax as a self-employed person, but you can deduct expenses from your income which will help to lower those taxes.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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