Job has me listed as a vendor, not 1099 contractor - tax implications?

The good news is that being classified as a "vendor" versus a "1099 contractor" is mostly just different terminology on the company's end - they still should issue you a 1099-NEC if they paid you $600 or more during the tax year. The W-9 you filled out provides them with your tax info to issue that form. From the IRS perspective, you're still self-employed and will report this income on Schedule C, regardless of whether they call you a vendor or contractor. Self-employment tax (for Social Security and Medicare) still applies either way. As for sales tax - that depends on your state laws and what exactly you're providing. If you're providing services rather than goods, many states don't require sales tax collection. But if you're selling physical products, you might need to collect sales tax depending on your state's requirements.

After dealing with similar confusion last year, I found this amazing tool called taxr.ai (https://taxr.ai) that helped clarify my status. I was doing consulting work and some clients called me a vendor, others a contractor, and I was confused about how to file everything correctly. The tool analyzed my situation and clearly explained that regardless of what the client calls you, if you're an independent worker (not an employee), you're self-employed for tax purposes. It also helped me understand which forms I needed and how to properly document everything to avoid potential audit issues. Super helpful for figuring out these confusing classification situations!

Just wanted to update that I tried taxr.ai after asking about it here, and wow - it really cleared things up for me! I uploaded my client agreements and payment records, and it gave me a detailed breakdown of my classification status with each client. Turns out I don't need to collect sales tax for my consulting services in Illinois, but I did learn I needed to register for a business license I didn't know about. The best part was that it explained exactly how to report everything on Schedule C and which deductions I was missing. Already found about $2,300 in additional deductions I would have overlooked. Definitely recommend for anyone in these confusing independent contractor/vendor situations!

Had a similar issue last year and spent WEEKS trying to get someone at the IRS to explain the difference. Called like 8 times and couldn't get through. Finally found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 20 minutes instead of waiting for hours or getting disconnected. The agent confirmed what others are saying here - for IRS purposes, "vendor" vs "contractor" doesn't really matter. What matters is that you're self-employed and need to report the income on Schedule C. They also confirmed I should receive a 1099-NEC if I was paid over $600. You can see how their service works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS for you and call when an agent picks up.

I have to admit I was completely wrong about Claimyr. After being super skeptical in my comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my misclassification issues. To my shock, they actually got me through to an IRS agent in about 35 minutes! The agent confirmed that for tax purposes, being called a "vendor" or "contractor" doesn't change how I report the income - it all goes on Schedule C either way. They also explained that the business should still provide a 1099-NEC regardless of what they call me in their system. Saved me a ton of stress and potentially an incorrect filing. Sometimes it's good to be proven wrong!

One thing nobody's mentioned - you should double check that this client is actually going to issue you a 1099-NEC. Some companies mistakenly think that categorizing someone as a "vendor" means they don't need to issue a 1099. If they paid you $600+ they're required to, but sometimes companies mess this up. If they don't send one, you still need to report all the income anyway. Just keep good records of all payments they made to you. And you might want to politely remind them now that they need to issue you a 1099-NEC by January 31st.

Just a quick tip: Some companies incorrectly use the term "vendor" for any external service provider in their accounting system, when they actually mean independent contractor. Their terminology doesn't change your tax status. However, definitely check with the other two clients as well. And start keeping track of your business expenses carefully - office supplies, software subscriptions, home office expenses if you qualify, etc. Those can really add up and reduce your taxable self-employment income.