Categories of Employment

There are several categories but let us focus on the two primary - W2 and 1099.

What's the difference?

W2: Paid a Salary/Hourly wage and generally pre-taxed accordingly via payroll, work directly for Company via an Employment Agreement/Offer Letter, utilizes resources provided by the Company to perform the work assigned. Company will most likely offer a medical, dental and vision plan. Employer must provide liability coverage and workers' compensation coverage based on employment type.

1099: Paid once work is performed to the specifications of the sub-contractor agreement/contract and obligated to pay taxes directly to IRS either in advance installments or during tax session, work for multiply Companies at one time, purchase their own resources/materials to complete work committed to via contract. Sub-Contractor is obligated to submit a copy of licensing (depending on work type), general liability coverage and workers' compensation coverage. 

When starting a new business, it may sometimes be easier to begin your adventure by hiring 1099 - Subcontracted work. Although you may have less say as it pertains to their day to day operation as they are freelance, as long as you have clearly outlined expectations and deadlines regarding job completion and how the 1099 is to be paid and in what timeframe, you also give yourself runway when paying out on initial completed work.