What's the difference between a W9 and W2 for new employment? Help needed!

This is actually an important distinction that many employers get wrong or deliberately blur. A W9 means they're treating you as an independent contractor (1099 worker), not an employee (W2). This is a significant difference. As a 1099 worker, you'll be responsible for paying both the employee AND employer portions of Social Security and Medicare taxes (15.3% total instead of 7.65%). You'll also need to make quarterly estimated tax payments since nothing is withheld. The fact that you're required to work in their office is a red flag. The IRS has specific tests for worker classification, and "where you work" is one factor. If they control when, where, and how you work, you're typically considered an employee, not a contractor. Rule of thumb: set aside about 30-35% of your income for taxes as a contractor compared to maybe 20-25% as an employee, depending on your total income.

After struggling with a similar situation last year, I found this incredible tool called taxr.ai (https://taxr.ai) that helped me understand my tax obligations as a contractor. It basically analyzed my situation and gave me a breakdown of what I needed to set aside each paycheck and what deductions I could actually claim. The biggest revelation was learning about the Qualified Business Income deduction which reduced my taxable income by almost 20%. Also found out I could deduct part of my phone bill and internet since I occasionally worked from home. These weren't things my employer mentioned when handing me the W9.

Just wanted to follow up - I checked out taxr.ai after posting my skeptical question and holy crap it's actually legit. I've been a contractor for 3 years and it identified legitimate deductions I'd been missing the whole time! It showed me that I could deduct my professional organization dues and some continuing education costs that my previous accountant never mentioned. It also gave me a really clear quarterly payment schedule and explained exactly how much to set aside from each check. Definitely worth checking out if you take the W9 job. Wish I'd known about this when I first started contracting.

Getting ahold of the IRS to clarify worker classification issues used to take me literal DAYS of redialing. Then I found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 30 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c When I was misclassified by an employer, I needed official guidance but couldn't wait on hold forever. Used Claimyr and got straight through to someone who explained exactly what forms I needed to file to report the misclassification. Saved me so much stress and potentially thousands in taxes I shouldn't have had to pay.

I have to eat crow here. After posting my skeptical comment, I was desperate enough to try Claimyr because I've literally been trying to reach the IRS for 3 weeks about contractor tax questions. Got connected to an agent in 47 minutes while I was making dinner. The agent confirmed what others are saying - if they control your schedule and workplace, you're likely misclassified as a contractor. She told me there's actually a form (SS-8) you can file to have the IRS make a determination on your proper classification. Not being properly classified could cost you thousands. This call literally saved me so much money and stress. Never thought I'd say this but worth every penny to not spend days on hold.

Based on your description, you're likely being misclassified. Here's a quick comparison: W2 employee: taxes withheld, employer pays half of Social Security/Medicare, eligible for benefits, unemployment W9/1099 contractor: no withholding, pay both halves of SS/Medicare (additional 7.65%), no benefits, no unemployment For $27/hr at 25 hrs/week, that's about $35,100 annually. As a contractor, expect to set aside about $10,500-12,000 for taxes. As an employee, you'd have about $7,000-8,500 withheld. The difference is roughly $3,000-4,000 annually in additional tax burden, plus no benefits or job security.

A quick tip if you do take this job - I make a deduction worksheet for all 1099 work. Track mileage between work sites (not commuting), any supplies you buy, portion of phone/internet if you use them for work, professional subscriptions, software, etc. Keep ALL receipts, take photos of them with your phone right away (they fade!). Also track any home office space if you do some work from home.

Just wanted to add another perspective here - I was in almost the exact same situation last year (required to work in their office, set schedule, but given a W9). After doing some research, I decided to take the job but immediately started documenting everything that showed I was really an employee, not a contractor. Things like: emails about required work hours, office policies I had to follow, equipment they provided, training materials, etc. After 6 months, I filed Form SS-8 with the IRS to get an official determination on my classification. The IRS ruled I was misclassified as a contractor and should have been an employee. Long story short - I got a refund for the extra self-employment taxes I paid, and my employer had to reclassify me and pay their portion of payroll taxes going forward. It was a bit of a process but totally worth it financially. If you take this job, document everything that shows they control how, when, and where you work. It could save you thousands later if you need to challenge the classification.