Understanding Worker Classification: 1099 vs. W-2 Shifts
When you book shifts through the Instawork platform, you'll notice that shifts are classified as either 1099 or W-2. This article explains the key differences between these two types of work and what they mean for you.
What Are 1099 and W-2 Classifications?
These classifications refer to different tax forms and employment relationships:
1099 Shifts: When working these shifts, you're considered an independent contractor providing services
W-2 Shifts: When working these shifts, you're considered an employee of Advantage Workforce Services (AWS), an Instawork affiliate
Important to understand:
- Every Instawork Pro can work shifts as a 1099 independent contractor
- Some Pros also choose to become employees of AWS to access W-2 shifts
- Pros can work both types of shifts, but each shift is classified as either 1099 or W-2
Key Differences Between 1099 and W-2 Shifts
Tax Withholding
1099 Shifts:
- No taxes are withheld from your earnings
- You receive the full amount you earned from the shift
- You're responsible for reporting income and paying taxes yourself
- You'll receive a Form 1099-NEC after the year ends (if you earn $600 or more)
W-2 Shifts:
- Taxes are automatically withheld from your earnings
- You receive your earnings after appropriate taxes are deducted
- AWS handles tax reporting for you
- You'll receive a Form W-2 after the year ends
Insurance Coverage
1099 Shifts:
- You're covered by Occupational Accident Insurance
- This insurance applies if you're injured while working a 1099 shift
W-2 Shifts:
- You're covered by Workers' Compensation Insurance
- This insurance applies if you're injured while working a W-2 shift
Working Both Types of Shifts
Many Pros choose to work both 1099 and W-2 shifts. Here's what you should know:
- You can switch between working 1099 and W-2 shifts as often as you like
- Each shift's classification is fixed - a 1099 shift remains a 1099 shift, and a W-2 shift remains a W-2 shift
- Your earnings, tax documents, and support will be handled according to each shift's classification
- You'll receive separate tax forms for each type of work at the end of the year
Completing Required Documentation
For W-2 Shifts:
If you want to work W-2 shifts, you'll need to complete additional documentation:
1. Go to your profile in the app
2. Look for the "Complete W-2 paperwork" option
3. Follow the prompts to complete your I-9 form
4. Upload the required identification documents
Once approved, you'll be eligible to book and work W-2 shifts while still maintaining the ability to work 1099 shifts.
Tax Considerations
1099 Shifts:
- You may need to make quarterly estimated tax payments
- You can deduct certain business expenses on your tax return
- You'll need to pay self-employment tax (covering Social Security and Medicare)
W-2 Shifts:
- Social Security, Medicare, and income taxes are automatically withheld
- You'll receive a W-2 form by January 31 for the previous year's earnings
- You can access your pay stubs through your ADP account
Which Classification Is Right for You?
Both classifications have advantages, and many Pros work both types of shifts. Consider:
- If you prefer having taxes automatically withheld, W-2 shifts may be more convenient
- If you want access to more shifts, completing your W-2 paperwork gives you more options
- If you prefer managing your own tax payments, 1099 shifts give you that flexibility