compare income differences between contract employment vs employee?

Question

which is financially better - to receive either 1099 income or salary income and benefits, .

Answer 1

That really depends on a LOT of details you have not provided. And usually entails details you wouldn't think of until perhaps it's too late. Best bet is to gather up all of the information about the jobs and yourself and visit an accountant. Call around from the phone book or use one referred from a friend. They will know all the right things to look at and be able to break it all down in black and white, bottom line it so to speak.

Answer 2

As a contractor you pay both halves of social security, so you pay an additional 7.65%.

As a contractor there might be expenses you can deduct from your gross income to get your net - this would reduce your social security tax. Also, as an employee, you can only deduct unreimbursed expenses that exceed 2% of your AGI, and then only if you itemize - as a contractor you can deduct them from the first dollar, and don't have to itemize.

So it's impossible to say which is "better" - depends on circumstances.

But as a contractor you won't have benefits (insurance, paid vacation and sick days), and as an employee you usually will have.