Taxes & Returns

The type of federal tax form you need to file will depend on your business structure.

For Sole Proprietorship, File Schedule C (Form 1040). For partnerships and companies, they must use particular forms, such as the Schedule K-1 and corporate tax return (Form 1120).

In your case, I believe you are the owner, so proceed to file Schedule C (Form 1040).

When hiring W-2 workers, you must manage their payroll taxes, including Social Security, income, and Medicare contributions, and provide additional benefits such as unemployment insurance and health insurance.

However, 1099 contractors bear the responsibility for their own taxes and receive fewer benefits. W-2 workers have more control over their work, despite contractors offering more flexibility and fewer administrative tasks.

If your company wants greater control, then choose W-2; if your company needs more flexibility, then 1099 may be better.