No announcement yet.

1099 vs W-2 for side-gig

  • Filter
  • Time
  • Show
Clear All
new posts

  • 1099 vs W-2 for side-gig

    Hi everyone,

    I am in the very early stages of my career and greatly appreciate your wisdom.

    I am starting a side-gig for some locum work on the weekends. My primary job is W2 with a 401k and health care benefits. For my locum job they are offering either 1099 or W2. I was doing a little bit of research and saw that I would have to pay the employer part of the Social security (6.2%) and Medicare taxes (1.45%) as a 1099.

    Is this the only down-side to the 1099 for my situation? As long as the 1099 pay is 10% higher than the W2 pay would the 1099 option be more beneficial since I would be able to have a solo 401k?

    From my understanding, If I am already contributing the max ($19,500) to my 401k at my day job and I earn about $24,000/year at my side-job I would be able to contribute and additional $4,800 (20% of net earning from self-employment) to my solo 401k per year. Is my math correct?

    Thank you.

  • #2
    There is more to it than just choosing whether you want to be a 1099 or W2 but, in the end, the onus falls on the employer.