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Accounting

Why 1099 Lifestyle Works Best For Today’s Economy

1099 Employees are the ones that are hired as independent contractors to complete the given tasks or particular job of the company. They are freelancers, and this ensures freedom for both parties. They are advantageous to the companies as their pay is not included in their payroll. Companies prefer freelancers, as they do not have to provide them with tax, medical expenditure, vacation expenditure, and many more. The brand owners see the chance of saving money by appointing these freelancers. The only disadvantage is that they might not feel that belongingness to the company because they do not work closely with the company, which might hamper their performance as well. Despite this fact, here’s why the 1099 Employee lifestyle works best in today’s economy.

Whether you term it as freelancing or entrepreneurship, there is no denying the fact that a non-traditional way of working is beneficial as many people see side gigs as a stepping stone for their careers. Independent contractors from designers, to freelance writers, are excessively taking up the job as 1099 employees. It has been more than a decade, since then it has been recorded that the 1099-MISC forms-the tax forms for independent contractors have been increased excessively, on the other hand, the forms for W-2, tax forms for traditional employees have been decreased by 3.5 percent. And there are many reasons why people opt for freelancing.

Here are the reasons why the economy works well for a nation that has more self-employed people: 

Two distinctive types of forms are utilized to report income to the IRS when filing taxes. They are-1099 and W-2, as we all know 1099 is for independent contractors, while w-2 is for those who are full-time employees. However, the difference between the two types differs based on their functionality. If you are a W-2 employee, it means that tax would be deducted from your income, but you would be provided with a wide range of benefits, that range from healthcare, to retirement contributions. But on the other hand, being a 1099 employee, you have to take care of all these benefits by yourself. You are responsible for your tax filing, paying for your business expenditure, and buying another type of equipment for your need to do a given task.

The pros of the 1099 Lifestyle: 

If you are working as a 1099 employee, your boss cannot command you to work according to a schedule or force you to come to the office to be present in the meetings full-time. The only criteria, you need to meet is that you have to meet the deadline, if you randomly feel like taking an off on Monday, you can take that, all you have to do is make sure to complete the project on time. Also, if you feel like getting your work done through someone, you can do that way too.

1099 has become a choice for Millennials 

Though freelancing has become a common choice for millennials, many people have been working for decades, but they prefer this style over the traditional way of working. Honestly, the youth has become the driving force, who is supporting the new labor trend. According to research, millennials are more interested in seeing the world and bringing positive changes in the world rather than going for a full-time job and settling down in families. They also take freelancing as a stepping stone for their career. The working style of 1099 grabs the attention of the youth as it gives the freedom and scope for experiments.

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