Employees: W-2 vs 1099

[Daniel Patton]

What are the tax benefits/downsides to making someone a 1099 employee vs a w-2 employee?

[Gino Barbaro]

@Daniel Patton

Make sure you discuss this with your accountant and classify the worker appropriately.  If you 1099 him and he decides to file a lawsuit claiming he was an employee, you are going to be on the hook for back taxes and penalties?

The U.S. is becoming a 1099 workforce.  Companies can't afford the benefits and costs of an employee, so they are all moving to the independent contractor model.  The problem with their decision is that most employers "control" their employees work.

Gino