Navigating the differences between being a 1099 independent contractor and a W-2 employee can be confusing, especially for healthcare travelers. At Jackson HealthPros (JHP), all our travelers are classified as W-2 employees, but you might encounter scenarios where you have to choose between being a W-2 employee or a 1099 independent contractor. Here’s a clear breakdown of how these classifications impact you:
Differences in Handling Taxes
The primary distinction between W-2 employees and 1099 independent contractors lies in tax handling. As a W-2 employee, your taxes are managed by your employer. This means the company deducts taxes from your paycheck and provides you with a W-2 form at year-end to help you determine your tax liability or refund.
On the other hand, 1099 independent contractors receive their payments without tax deductions. You’ll need to set aside a portion of your income for tax payments and handle self-employment taxes on your own. It’s crucial to plan for these expenses to avoid surprises during tax season.
Who Receives Benefits?
Benefits are another key difference. As a W-2 employee with Jackson HealthPros, you enjoy a range of benefits from day one, including a comprehensive Cigna health plan, a matching 401(k), license reimbursement, and more.
In contrast, 1099 independent contractors do not receive employee benefits from their contracting agency. This means you’ll need to secure your own health insurance, retirement plans, and housing. However, this also offers more flexibility in choosing the coverage that best suits your needs.
Liability Coverage Classifications
Professional liability coverage varies between the two classifications. As a W-2 employee, your employer provides coverage for work-related incidents, including workers' compensation, professional liability, and general liability.
As a 1099 independent contractor, you’re responsible for obtaining your own liability insurance, including workers' compensation, professional liability, and general liability coverage. This is essential to protect yourself from potential job-related accidents and legal issues.
If you have any questions about the differences between being a W-2 employee and a 1099 independent contractor, feel free to reach out to our team. We’re here to help clarify any uncertainties and support you in making the best choice for your career.