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"Regular part-time employees" are defined as those who work at least half-time, but less than full-time. This means that a part-time employee is scheduled to work at least 18.75 hours per week in a 37.5 hours per week position, or at least 20 hours per week in a 40 hours per week position.
It is also important to note that a self-employed worker can be both employed and self-employed at the same time. For example, a worker can be an employee at a company during the day and run a business by night. Employment status may also change from contract to contract.
A 1099 worker is one that is not considered an employee. Rather, this type of worker is usually referred to as a freelancer, independent contractor or other self-employed worker that completes particular jobs or assignments. Since they're not deemed employees, you don't pay them wages or a salary.
Like other small business owners, sole proprietors do have the ability to hire employees. As per the IRS, any time a sole proprietor hires an employee other than an independent contractor, the sole proprietorship will need to obtain an Employer Identification Number (EIN).
What this means is that being a 1099 employee is adding 7.5% of your income to your own personal tax liability. That means if you make $50,000 a year as an independent contractor, you will pay approximately $3,700 in employment taxes that your employer would have otherwise had to pay.
Simply put, being an independent contractor is one way to be self-employed. Being self-employed means that you earn money but don't work as an employee for someone else.
Whatever you call yourself, if you are self-employed, an independent contractor, or a sole proprietor, a partner in a partnership, or an LLC member, you must pay self-employment taxes (Social Security and Medicare). Since you are not an employee, no Social Security/Medicare taxes are withheld from your wages.
A sole proprietor can hire employees. There is no limit to the number of workers you can employ. As an employer, you are responsible for all employment administration, recordkeeping, and taxes. You have the same responsibilities as any other employer.
If you are an independent contractor, then you are self-employed. The earnings of a person who is working as an independent contractor are subject to self-employment tax. To find out what your tax obligations are, visit the Self-Employed Individuals Tax Center.
Independent contractors provide goods or services according to the terms of a contract they have negotiated with an employer. Independent contractors are not employees, and therefore they are not covered under most federal employment statutes.