1099 vs. Corp-to-Corp
What are the differences between 1099 and Corp-to-Corp consulting?
As an industry leader, The Select Group is here to provide you with useful information to help further the progression of your career. Although The Select Group no longer offers 1099 contracting, we want to provide our consultants and clients with as much valuable information as possible to help them make the proper decision for their career path.
Going the Corp-to-Corp route means that another corporation, which is your client, pays your business for the services you provide. There are no self-employment taxes, but it's a much more complicated option since the bookkeeping and tax reporting requirements are complex. The biggest downside of setting up your own corporation is the extra time it takes to manage the records and all required tax filings.
As a 1099 contractor, you're self-employed and solely own an unincorporated business. It's considered to be the simplest form of business organization to start and maintain. However all your profits are subject to self-employment tax and income tax.
Also, any expenses that you incur to run your business are all deductible, such as home office and vehicle costs if the car is used for work purposes. Finally, since 1099 workers aren't protected by minimum wage laws, they risk losing money if the job takes more time than expected.