Key Takeaways
W-2 workers have taxes withheld; 1099 workers must pay self-employment tax
Track all work-related expenses: they reduce your taxable income
Set aside 25-30% of 1099 income for quarterly taxes
Mileage is often the largest deduction for gig workers (70¢/mile in 2026)
Free tax help is available through IRS VITA if you earn $67,000 or less
Tax Information Disclaimer
Tax information on this page is for general educational purposes only and is not tax advice. Tax rules change frequently and depend on your individual circumstances. Always verify current rules with the IRS or your state tax authority and consult a qualified tax professional or CPA before making tax-related decisions.
What's the Difference Between W-2 and 1099 Taxes?
W-2 staffing employees have taxes withheld automatically, while 1099 contractors owe self-employment tax of 15.3% on top of income tax. This guide covers both situations. Tax rules vary by state; consider having a US tax professional review your specific case.
Your tax situation depends on how you're classified:
W-2 Employee:
- Taxes are withheld from your paycheck
- Employer pays half of Social Security/Medicare
- File standard tax return, relatively simple
- Access to benefits like Same Day Pay
1099 Independent Contractor:
- No taxes withheld: you're responsible
- Pay self-employment tax (15.3% for Social Security/Medicare)
- Can deduct business expenses
- Must pay estimated quarterly taxes
Good news: Staffing-app workers are W-2 employees, which simplifies taxes significantly.
Self-Employment Tax Explained
If you receive 1099 income from other gigs, you pay self-employment tax:
What it covers:
- Social Security tax: 12.4%
- Medicare tax: 2.9%
- Total: 15.3% on net self-employment income
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