1099 vs. W2 for SLPs
As an SLP, I’ve worked as both a 1099 and W2. There’s a lot of talk about the difference between the two. I personally prefer to be a W2 mainly because you don’t have to worry about setting aside taxes, but there are more things to consider than just that. I’m going to break it down for you!
1099:
-You are referred to as an independent contractor.
-You fill out a 1099 form
-Taxes are NOT withheld, which means you need to make sure you save part of your income so you’re not surprised when tax time comes around. It depends on your state, but in Virginia, my CPA recommended setting aside 38% of my income (which is a lot)!
-You sign a contract, but are free to terminate whenever you wish (the person hiring you will stipulate how much notice you need to give). They are also free to terminate you if they wish.
-There’s no paid time off, sick time, etc.
-There may be more tax deductions you can make (home office, etc.)
-You need to have your own liability insurance
-You need to maintain state licensure – ASHA licensure (CCCs) is only required in a handful of states.
-You provide your own materials to do the job (computer, internet, tests, materials)
-There may not be payment for cancelled or missed sessions
W2:
-You are referred to as an employee.
-You fill out a W2 form upon being hired, this includes withholding information for taxes
-Federal and state taxes are withheld, so you don’t need to set aside money
-You can be paid either hourly or via a salary
-You may earn paid time off, sick time, etc.
-Your employer will provide coverage under their liability insurance
-You need to maintain state licensure – ASHA licensure (CCCs) is only required in a handful of states. Your employer may or may not cover this cost.
-Your employer should be providing tests, etc. in order for you to do your job
I recommend talking to a CPA especially if you’re a 1099 because taxes can get confusing! Hope this helps!
Information compiled from the following websites:
Would you consider editing the “1099 vs W2 for SLPs” page? Specifically the pieces on ASHA licensure being required. ASHA licensure (CCCs) is only required in a handful of states that require it for billing medicaid. Otherwise, SLPs that are licensed by their state board only are equally competent. You might be interested in @FixSLP for more information. Thank you!
It’s been edited