D2D glossary / How reps get paid
What does 1099 mean in door-to-door sales?
1099 contractor: 1099 means you are paid as an independent contractor, not an employee. The company withholds no tax, and you pay your own income tax and self-employment tax and cover your own benefits.
The name comes from the tax form a company sends a contractor after the year ends. Most door-to-door reps in solar, pest control, security, fiber and roofing are contracted this way.
Three things change compared with a W-2 job. No tax is taken out of your checks, so you are expected to pay estimated tax each quarter, including self-employment tax of 15.3 percent on most net earnings. Business costs such as mileage may be deductible. And health insurance, retirement savings and workers' compensation are yours to arrange unless the company offers them.
This is general information. For your own return, talk to a tax professional.
Ask before you sign
Am I a 1099 contractor or a W-2 employee, and which costs do I cover myself?
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1099 contractor: quick answers
What does 1099 mean in door-to-door sales?
1099 means you are paid as an independent contractor, not an employee. The company withholds no tax, and you pay your own income tax and self-employment tax and cover your own benefits.
What should I ask a company about 1099 status?
Ask this before you sign: "Am I a 1099 contractor or a W-2 employee, and which costs do I cover myself?" Get the answer in writing, in the rep agreement or the pay plan.