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Freelancer or employee? One path hands you a bigger check today; the other can quietly hand you a five-figure tax bill tomorrow. In this episode, Anastasia and Myiesha break down how to choose between W-2 and 1099 pay without getting burned by the fine print. If you've ever stared at a freelance offer and thought, "This check is way bigger than my old salary—what's the catch?" this conversation is for you. Anastasia and Myiesha pull back the curtain on the real math behind employee pay versus…
Let’s Get Fiscal is the money podcast for creative entrepreneurs who want to keep more of what they earn and grow their business with confidence. Hosted by CPA and tax strategist Anastasia, each episode makes taxes, bookkeeping, and money management simple, practical, and even fun. We cover topics like tax deductions, small business finances, creative business strategies, and how to avoid costly mistakes—without boring jargon. Whether you’re a filmmaker, designer, artist, or small business owner, you’ll get actionable tips, real-world examples, and a few laughs along the way. If you want to stress less about money and focus more on doing what you love, this is the podcast for you.
Freelancer versus employee. Which one are you gonna choose?
Myiesha Fisher:Okay. So freelancer versus employee. I feel like this is a question that comes out quite often of like how one should like choose to get paid. So I guess maybe we'd break down, like, what kind of the difference is between freelancer and employee, and then how do we make those choices? Yeah.
Myiesha Fisher:Mhmm. Mhmm. Take it away,
Anastasia Aiello:love. Alright. So a freelancer, you're normally gonna fill out a w nine form, which says, you know, your information so that they can send you a ten ninety nine at the end of the year for all of the services that you provide versus a w two employee, you're going to actually be an employee under that company covered by all of their benefits and their insurance plans. You would fill out a w four, and then all of the taxes and everything is going to be withdrawn from your paycheck, and then you get the remaining amount. So a lot of people are really enticed by the freelancer side gets because
Myiesha Fisher:you just get the money. Yeah. That's it. Like, nothing's taken out of you.
Anastasia Aiello:Yep. So it looks like you're getting paid more money. Mhmm. But you have to really kind of determine, are you getting paid more money that way? Yeah.
Anastasia Aiello:Because a lot of the things when you're a w two employee, they're factoring in things like PTO, paid time off. Yeah. Yeah. You know, sick time. Do you have health insurance?
Anastasia Aiello:Do you
Myiesha Fisher:have Retirement? That usually just comes right out too with each paycheck. Yep. Mhmm.
Anastasia Aiello:A four zero one k plan, maybe has some matching. Mhmm. You have your workers' comp. Sometimes they give you life insurance policies, things like that, short term disability Yeah. All of that fun stuff.
Anastasia Aiello:And so when you move over to a freelancer, a lot of times those have to be self funded or kind of funded through the business that you own, which is basically you at the end of the day. Yes. So the employee and the employee. Yep. Yep.
Anastasia Aiello:Yep. It's definitely quite a few things that you have to continue to budget for and take into consideration. Mhmm. But, I mean, we can even just start with, like, the forms Yeah. And what they mean.
Anastasia Aiello:You know? So when you have the w two Yep. It goes into your you get the w two. It tells you how much you withheld for both the federal and the state. You file your tax return.
Anastasia Aiello:You're done.
Myiesha Fisher:Yeah. You literally, you know Copy, paste, and sometimes just import.
Anastasia Aiello:Yep. Right. Exactly. Exactly. Yep.
Anastasia Aiello:And there's a lot of different programs online. It can do it all itself. Hopefully, you did your w four correctly, which we are seeing a lot of problems with these days.
Myiesha Fisher:Change it, though, so I do think it's a little bit more confusing after the latest change. So, yeah, that's fair.
Anastasia Aiello:Mhmm. Mhmm.
Myiesha Fisher:Does that make me old when I'm like, I remember when that form was like, you put a number blah blah blah.
Anastasia Aiello:It changed, like, half a decade ago. So Has
Myiesha Fisher:it really been that long since the switch? That's crazy.
Anastasia Aiello:Yeah. I still think it's confusing. Yeah.
Myiesha Fisher:And it was kind
Anastasia Aiello:of a COVID thing that happened, which was a whole tricky thing. Yeah. So they were like, put my money in America's pockets, but really all they did is they decreased your withholding. So now you don't really get a large refund anymore. Yeah.
Anastasia Aiello:And you're more likely to have a large payment, especially if you're married and you didn't you both filed saying that you were the only source of income and, you know, or if you get a bonus
Myiesha Fisher:Mhmm.
Anastasia Aiello:Towards the end of the year, that would mess up all of the calculations, and then you end up owing, you know Yep. Tens of thousands of dollars.
Myiesha Fisher:I feel like I also got tripped up when I had my daughter, and then I, like, picked something because I thought I had a kid, and then we ended up owing after many years of never owing. And I was like, did we do something wrong here? Yeah. Like, it would Yeah.
Anastasia Aiello:Yeah. Because it has that dependence Exactly. Yeah. The dependent section. It did keep it, but But there's no such thing as, like, like Yeah.
Anastasia Aiello:Dependence on the top line as your exemption now. So Yeah.
Myiesha Fisher:No. It was definitely strange, so I changed it to just being, like single again or something.
Anastasia Aiello:Saw this coming, and they retired.
Myiesha Fisher:They were just like, we are out. So
Anastasia Aiello:if you're asking why we can't find an accountant,
Myiesha Fisher:it's because They know.
Anastasia Aiello:Yeah. They know. Yeah. So w twos, they can be fairly straightforward. A ten ninety nine, you know, so a 1099, it's for services provide a 1099 NEC is for services provided.
Anastasia Aiello:Mhmm. It doesn't necessarily mean that it should be created on a schedule c, though. So there is a little bit of a caveat there. So a ten ninety nine to have a schedule c, it really has to have the intentions of being a business. Yeah.
Anastasia Aiello:And so once you have that business intention and you're running it as a full business, then we can open up this schedule c, which, you know, there's a million pieces of
Myiesha Fisher:Yeah.
Anastasia Aiello:Paper. But that's where you're claiming the $10.99 income and any other income because you have to claim all your income whether or not you received a form for it. Yep. All of it.
Myiesha Fisher:All of it.
Anastasia Aiello:And then at that point, you're able to add up all of the expenses. So a W two employee, you're not able to expense, you know, research or business use of home or mileage or anything like that.
Myiesha Fisher:There's way less options there.
Anastasia Aiello:Oh, right. Right. Because your employer is supposed to be reimbursing you, but, you know, the number that do. But I digress.
Myiesha Fisher:So with the Schedule C, you can have those expenses that actually take too long
Anastasia Aiello:to As long as they are documented, they are ordinary and necessary business expenses, all of that fun stuff, then you're able to utilize the Schedule C to decrease your income, but then you also have other schedules that are adding in that Social Security and Medicare because there hasn't been that mechanism of that biweekly paycheck or weekly whatever. And
Myiesha Fisher:you're under, like, a
Anastasia Aiello:d d two. Mhmm. Mhmm. So they're gonna collect not only the income taxes that was never withheld on your paycheck, but also the Social Security and Medicare that's attached there. And one of the things that people get tripped up at moving from a w two over to ten ninety nine.
Anastasia Aiello:So w two, they take all your money, and then when you file your return, they'll give you a little bit of it back. Yeah. So you feel like, oh, I'm getting a refund. All of this fun stuff. It's a much different mindset when you're $10.99, you haven't given them anything, and then they say like, okay.
Anastasia Aiello:Give me all this extra money. Mhmm. Mhmm. You know? Even if those $2 amounts are the same across two years It's the vibe.
Anastasia Aiello:Yes. Yes.
Myiesha Fisher:Yes. Now I
Anastasia Aiello:know this. Because when you're on a W two, you don't notice that you've paid them Yeah. $30,000 you know, versus if you're a $10.99 and they say, okay. Can I have $30? You're like, excuse me.
Anastasia Aiello:I don't think so. I don't wanna do any of that. You know, so that, a lot of it is the retraining of actually reading their tax return and being able to plan for a lot of these expenses and what it actually means. Because the goal is never to not pay any taxes. Yeah.
Anastasia Aiello:You know, taxes are an integral part of kind of society, but the Taxpayer Bill of Rights says that you're not required to pay more than what you actually owe. So that gets a little bit more complicated with the $10.99 portion because you're able to actually offset all of these other business expenses. So that's why, like, a lot of people, you know, get upset about, you know, why do I have to file my taxes? If they already know how much I owe, just tell me what I owe and send me the check. You know?
Anastasia Aiello:Why do we have to go through all of these other pieces? And it's just because there are other,
Myiesha Fisher:know Scenarios and different things.
Anastasia Aiello:Levers that can be pulled that they wouldn't have, you know, necessarily have access to. You know? Even if you have a w two, if you had $60,000 worth of medical expenses because, you know, like IVF and then having a baby or, you know, what have you, or you decided to adopt a child, things like that, they wouldn't have any visibility to that, but those are things that can definitely affect your tax situation. Yeah. So But there's like It seems like from what I'm, like, have, like, dealt
Myiesha Fisher:with with clients and stuff that there is kind of a pro about the fact, like, on the $10.99 side, like, yeah, you're not paying out every single paycheck, but, like we have talked about in other things, like you could put that money that you're gonna have to pay no matter what into like a high yield savings account, then your money's kind of working for you Mhmm. Versus like they get the money every single paycheck and like that's that. And then when you get a refund, it basically means that you paid the government too much money, and then you're just like, now wait a second. Mhmm. And it wasn't working for you, I guess, during that time frame.
Myiesha Fisher:So there is like a pro. You just have to make sure that you're very clean and organized and intentional with it, but it can be like kind of nice. Yeah. Well, and I
Anastasia Aiello:think you said like a good thing about a refund being.
Myiesha Fisher:Mhmm.
Anastasia Aiello:They're giving you back your money. Yeah. You are not receiving free money. Yeah. No.
Anastasia Aiello:They are just giving back With no interest
Myiesha Fisher:or anything.
Anastasia Aiello:Yeah. Right. Exactly. Yeah. Exactly.
Anastasia Aiello:They took your money, and now you're getting it back. Mhmm. You know, there's really not a lot of, you know, like true refunds where we're adding new money to the situation. Yeah. Yeah.
Anastasia Aiello:You know? So, kind of changing the mindset of, like, I will have to pay Mhmm. If I'm a $10.99 bit, you know, or a freelancer, I'm gonna have to pay tax. And I'm gonna see it happen, all of that fun stuff, but then that gives you a little bit more motivation to actually, like, pay attention and plan it out. And So it's
Myiesha Fisher:not a surprise at the end. You already have a little nest egg ready to go, like, you already put that money away as, like, not really yours, but you have more options as well with that money.
Anastasia Aiello:Yep. Always say too, you can sit down and you can decide how much tax you're comfortable with paying
Myiesha Fisher:Mhmm.
Anastasia Aiello:Or you can wait until the IRS decides for you. Yeah. And a lot of that, it's just gonna be tax planning. Mhmm. You know?
Anastasia Aiello:So those are kind of some of the things and that I think are good to address as you're going through a lot of your planning scenarios and looking at your business.
Myiesha Fisher:Well, the difference too, like because we did talk about, like, the w four, but we didn't talk necessarily about the w nine. There's not that crazy a difference between the two. You're really just, like, giving your information. You do have to give what your business tax classification is, so you do you will need to know that. I do know we have clients that'll be like, what am I again?
Myiesha Fisher:Just so that they know how to fill it out. Right. Because many businesses before they pay someone will request a w nine even if your tax classification means, like, you don't have to get, like, a ten ninety nine at the end. Mhmm. They still like to have it.
Myiesha Fisher:So it's good to know, like, what is your business so that you can Right. Answer that question.
Anastasia Aiello:Yeah. An LLC can literally be taxed as anything. Yes. So if you say, like, oh, I have an LLC, like, great. That doesn't help me at all.
Anastasia Aiello:Yeah. Yeah.
Myiesha Fisher:You gotta tell me what kind. Yeah. What kind are we, like, calling you as under the federal government? So yeah. And then just, like, either if you have a separate EIN, you put that EIN there or some people have, like, their sole proprietors, so it's their, like, social.
Myiesha Fisher:So just putting that in. Mhmm. So it's very similar to the w four, but I know that that one question I've had clients that get tripped up on it of, like, what am I again? Like, what do I click here in order to, like, do this? Because, like, there's, like, a tax if you're an LLC, taxed as, and then there's, like, separate little check boxes, so it can be a little tricky.
Myiesha Fisher:I still think it's easier than the w four, but it can be a little tricky. Well, right.
Anastasia Aiello:The w four, you
Myiesha Fisher:missed There's one lot of stuff there.
Anastasia Aiello:That's another $13 check. You're right there.
Myiesha Fisher:Exactly. Yep. So, yeah.
Anastasia Aiello:Well, I mean, I think it's a it's definitely a change. It's something that you need to plan for. Mhmm. You know, obviously, business owners wouldn't pay you more as a freelancer if it didn't benefit them in some way because they're moving liability and responsibility to Yep. You need to factor that in before you make that switch to make sure that it actually benefits you and it's not just kind of like a one-sided It needs to be symbiotic.
Anastasia Aiello:Especially if they
Myiesha Fisher:have really good benefits and you're just like, ah, this match is more than I would have put away for retirement if I was paid separately. Those are good things. Like, those are things to, like, really, like, take into consideration. Mhmm. How much is the health, insurance on the market if I were to go do it versus being part of someone else's plan.
Myiesha Fisher:But a lot of what we see too is that like a lot of your freedoms, I guess, as an individual kind of go away when you're employer you're your employee. So you're just like, you have to answer, you have to be at some place at a certain time, you have to do certain things. So there is some like a freedom that's not as open, but a lot of other things are taken care of for you. So it's really just like, how do you work as a person? Like, how are you your best self?
Myiesha Fisher:Is it answering to someone else and like they take care of all the things and you just do what you love to do and then that's it? Or do you
Anastasia Aiello:But if move, that's the thing, it's about what is the true cost of that freedom. Exactly,
Myiesha Fisher:what is And making sure
Anastasia Aiello:that you are aware of all of these extra responsibilities that are outside there, because it can seem very enticing
Myiesha Fisher:Mhmm.
Anastasia Aiello:To, like you said, have all this freedom, technically it'll have, you know, all of this fun stuff, it kind of really changes that working relationship. However, they did pass on a lot of responsibilities and risk to you. Yeah. So recognizing that, being aware of that, and being able to plan for that Mhmm. Is going to be a big thing, even if all of it is is just like now you have this extra thing on your tax return, and you don't know what you're doing any like, you know, that's what we see a lot is where they say, okay.
Anastasia Aiello:Great. That sounds amazing. And then they're like, oh, no. I don't I can't do any of it. What do I do now?
Anastasia Aiello:You know? So just kinda being aware
Myiesha Fisher:Mhmm. Mhmm.
Anastasia Aiello:That it does add additional responsibilities Yeah. To your plate, and it's never as a favor. So if a business is coming to you to do one or the other, it's not as It's a favor to to them. A benefit to them to put you in that position. But just means
Myiesha Fisher:that is it as beneficial for you as well?
Anastasia Aiello:Exactly. Exactly. Exactly. So that is a little bit more about how to make the decision between being freelance or an in house employee. So if you have any questions, feel free.
Anastasia Aiello:Reach Mhmm. Us And we would love to hear from you. We'll talk to you soon. Bye, guys.
Myiesha Fisher:That's it for this episode of Lets Get Fiscal. If this helped you see your business differently, follow or subscribe on your favorite podcast platform so the next episode is already waiting for you. And if a specific money question came up while you were listening, send it through the link in the show notes. Real listener questions help shape future episodes. You can also follow Lets Get Fiscal on social media for more tax tips, business finance breakdowns, and clips from the show.
Anastasia Aiello:Until next time, keep building the business behind the work.