How do I work with 1099s? ?

You will receive 100% of your pay with no income tax or social security tax withheld, and will have to pay it yourself. They will send you a Form 1099 showing what they paid you. You will then need to report it on Schedule C, deduct any ordinary and necessary expenses related to your work, then pay 15.3% as self-employed social security on the net profit after deducting expenses. You will also need to pay income tax unless your deductions and exemptions cover it all. If your income is very low, you might get more in an earned income credit than the total tax due. If you will owe anything, you need to file quarterly forms 1040ES to pay an estimate of what you will owe. You can be penalized for not paying on a pay-as-you-go basis. I did not pay my tax in equal quarterly amounts and even though I overpaid a little in total, I had to pay a penalty for not paying it equally when due.

You are subject to both regular income taxes AND a self-employment tax. The self-employment tax is 15.3% of 0.9235% of what you make. You can deduct the same types of expenses as for a regular (employee job). However, you claim the deductions on either Schedule C or Schedule C-EZ, not Schedule A. You can deduct 1/2 of your self-employment tax. You may be eligible to deduct your contributions to health insurance and/or retirement plans. You are supposed to calculate (or estimate) the amount of your taxes for each year and pay 1/4 by April 15 of that year, 1/4 by June 15, 1/4 by September 15 and 1/4 by January 15 (of the following year). Use Form 1040-ES to calculate the amount to pay each time. If you have not been doing this and the amount for the year exceeds $1000, then you will owe a penalty, in addition to the tax.

When tax filing comes around, you'll receive a 1099 form from them rather than a W-2. Nothing iwll be deducted, you are responsible for making quarterly estimated payments to the IRS and probably to your state. The income tax you'll owe will be the same total as if you had made the money as an employee. The amount for social security and medicare, called self employment tax, is higher since the company isn't matching what you pay in, so you pay both halves.