W2 vs 1099 for tech workers | Which is better? Salary or hourly contractor?
I recently did some calculations to decide whether it would be more tax advantageous to do software development as an employee or contractor. In this video I walk you through the math comparing the benefits and tax outcomes for a hypothetical W2 and 1099 worker.
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Background Music:
Karl Casey @ White Bat Audio
Eternal Night - • Cyberpunk Dark Synthwave - Eternal Ni...
0:00 W2 explained
1:20 1099 explained
3:04 W2 benefits
7:19 FICA (Social Security & Medicare tax)
10:15 Paystub walkthrough
13:14 W2 deductions
14:15 Single vs Head of Household vs Married
16:02 Federal taxable income
18:10 Progressive tax system explained
20:14 Take home pay after taxes
22:40 1099 benefits adjustments
23:41 1099 FICA taxes are higher!
27:56 1099 Federal tax deductions (Schedule 1)
31:38 W2 vs 1099 tax comparison RESULTS!
35:22 1099 writeoffs for biz expenses
