A 1099 worker is a freelancer or independent contractor who provides services to an individual or organization on a contractual basis. The number “1099” comes from the the 1099 form reported during United States tax filing. A 1099 Worker is not considered an employee of the company, but rather an independent contractor—often referred to as a freelancer. This type of arrangement is common in many different industries and can be beneficial for both parties.
A 1099 worker is responsible for payment of all their own taxes, including self-employment tax, and must report all income earned on their own tax returns. For the company, this arrangement means they don’t need to take on the responsibility of managing payroll taxes, insurance, and other employer costs associated with traditional employees.
In some cases, a 1099 worker may also be an independent consultant or contractor hired to provide specific services. This arrangement gives the company flexibility in terms of cost and access to a larger pool of talent without the traditional employer obligations.
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See also: QBI Deduction, Contractor, 1099 Form
