W2 vs 1099: Which Actually Makes You More Money?

All right. You're watching this video because maybe you're on the fence of going into 1099, or maybe you're 1099, you're on the fence of going to W-2 sales, and you want to know where do things actually differentiate based on what I prefer? Is there a better path for me? Are there things that I need to be aware of before I choose one or the other? And ultimately, which one's going to get me ahead faster? Now, I've been a W-2 sales rep, made a lot of money on that side. I've also made a lot on the 1099 side. Currently, I am in the 1099 space working with people who are also in that space. But I'm going to try to give you an unsolicited breakdown of what the pros and cons are of each side, because more than I'm an advocate of being a 1099 sales rep, I'm an advocate of people changing their lives with sales. So this quick presentation, I'm going to break down some of the numbers. Taxes is the real factor that, that changes the numbers here. And then some of the just kind of personal preferences and reasons you may want to consider one side or the other. Now, before I get into this, you guys, I am not a tax professional. I'm not a CPA. You should have your own CPA. If you don't, if you go to the first link in the description, you can use our partner that our community guys use. They take care of all the 1099 tax stuff. Don't take what I say as law because I'm an individual who hires a professional, just like you should. This is just what I've learned through the years filing on both sides. So first and foremost, guys, they're both good. Okay? Both of these options are better than most other options out there that are not sales. On the W-2 side, you're gonna get a lot of benefits. You're gonna get your taxes automatically withheld. You probably might get benefits, unemployment, workers' comp, employer pays half of your FICA taxes, lower audit risks, and equity upside. However, in 1099 land, you get to take advantage of tax deductions, self-employed health insurance, QBI deduction, which we'll talk a little bit more about, corp election where the real differences are made. Retirement leverage when it comes to contributing to retirement accounts. And generally you're a little bit less capped on what you can make. When we get into the 1099 side of things, deductions are a big part of the picture. How do we lower our taxable income? And one of the easiest, lowest hanging fruit is going to be deductions. So if you work from home, just like I have this office here, I can write this off against my taxable income. Any kind of software or tech, health insurance, vehicle if you're using your own vehicle, training and coaching. So like we run a sales community that works with people to land these 1099 jobs. It is a write-off. Retirement contributions, your phone if you're using it for sales, business meal and travels, and the QBI deduction. The QBI or the qualified business income deduction is gonna let you deduct up to 20% of qualified business income. From your federal income taxes. When you're making a lot of money, that can be a lot of money. And if you are 1099, the S corp election is pretty much the make or break. If you're not taking advantage of the S corp election and you're in a status that would qualify you to do so, you're literally 1099 for no reason. You're hustling backwards. If you are in the ballpark of $80K to $100K, I've been told even $60K works, S corp is gonna basically save you a fair amount on your taxes. As long as you pay yourself a reasonable W-2 salary, You can take the rest of your business income as distributions, which are not subject to self-employment tax. So let's just say you make $200,000 as a sales rep. This structure is going to save you $10,000 to $15,000 in payroll taxes alone. That adds up over time. So which one is for you? Well, if you want predictability and built-in benefits early in your career and you need more structure, if you have a family relying on consistent income and group health insurance, If you're not very disciplined with your money or tax planning, and if you're at a company with meaningful equity upside, W-2 could be for you. The 1099, on the other hand, if you're a top performer who's always getting capped— that was my experience, that's why I was interested in the 1099 stuff— if you want more geographic and time freedom, technically as a contractor nobody can tell you when to work or how to work, just the deliverable that needs to get done. If you can handle some income volatility, if you're going to use the deductions, because if you don't use any of the deductions, you are 1099 and playing the risky path for no reason. If you plan to eventually start your own thing, this is an easy stepping stone. And if you do have someone such as a spouse that has health insurance, makes it a lot easier. But I have something and I can link it down below. I'll do second link in the description is something I've been using for a couple years. It's called CrowdHealth. It's the best alternative that I've found. It's very affordable and I've used it in, you know, doctors and hospital visits and it It covers a lot. Now, comparing the 2 at face value is not going to give you the full picture. And that's what a lot of people do. That's why I'm kind of making this video. Here's a quick breakdown on how some of these numbers are going to start to stack up on both sides. Let's say you get $150K base W-2, $25K a year worth of benefits, and employer is going to pay your FICA taxes. Effectively, your package is $186K with simplicity, predictability, and unemployment. Safety net. Scenario B is 1099 equivalent. You're gonna make a little bit more. You're gonna pay for your own health insurance if you want it. I mean, if you're young, you might be on your parents. You might have, you know, a spouse who's gonna already have that. There's ways around this. You might use the second link in the description. I think it's a free trial or a really discounted rate. That's what I've been using. You are going to pay your 15.3% self-employment, whereas over here you only pay 7.65%. Now, if you file as S corp, which again, if you're going to do this, you should file as S corp, that gets cut in 2. We're also not taking into account retirement deduction. This is where 1099 pulls ahead. With the right structure in place, a 1099 rep making $200K is going to take home $20K to $40K more annually, taking advantage of all the stuff that we're talking about here. The big difference maker here, guys, is not income. It is taxable income. So if you make $200K as a W-2 rep, your taxable income is $200K. If you make $200K without any S corp, just 1099, your taxable income is $163K. And if you do so optimized through an S corp, taxable income is still $163K, but then we can take out more FICA taxes and game the system just a little bit more. This is also assuming you're in the state of Texas where I am and there's no state income tax. So Just in case you were confused. And here's the difference maker. Let's say you're making $200K gross. You're investing 20% of everything you have at the end of every year into the S&P, which is going to average 10% nominal return compounded. The numbers show you're going to have the most money using 1099 S corp status should you be able to take advantage of all the benefits. The biggest benefit of being 1099 is Get more money working for you faster so that you don't have to be a sales rep forever. By the way, I forgot to cover this. There's this thing called bonus depreciation. You guys have seen people write off vehicles. Well, as a 1099 sales rep, you're allowed to take advantage of bonus depreciation. I'm not going to go over this super, super in-depth. But what I want to show you is that should you get in touch with a tax professional that knows the 1099 sales rep or business ownership game, there are many more things that you can take advantage of versus being a W-2 employee. If you need that partner, again, I'm going to link mine down below. First link in the description. That's who everybody in our community uses. You'll even get a free consultation if you use the link below. So overall, you guys, 1099 has more upside for disciplined operators who are going to take this seriously as if it's their own business. The W-2 side, however, has more upside for those that literally don't want to focus on anything else, just want to clock in. Clock out, have the stability, and still do well. You can do well on both sides. I got into 1099 because I was more interested in the freedom and autonomy that came with it, in addition to being able to earn more money. If you work a 1099 sales role without taking any of these deductions, without the S corp filing, without any of the strategies that we talked about or that you can talk about with the people through the first link down below, you're taking on more risk than you need to, and you might as well work a W-2 job. But if you do value being remote, not being controlled every hour of your day, being paid on performance and not for being in corporate meetings or whatever, 1099 is the way to go for you. And the community that I run for the past basically 4 years, man, we've been posting these roles for people like you, primarily made up of setter and closer roles. This was March of 2026. And we have a ton of companies looking, a ton, even going back to February, a ton. I think overall we had 779 jobs posted last month. If you are interested in checking out our community, you can go to the 3rd link in the description. That is gonna be our community page where we have a bunch of results and frequently asked questions. And you can actually just click right here and fill out the form and talk with us. We help people with sales backgrounds, without sales backgrounds, In the US, not in the US, English their first language, English not their second language. We help people do this. You jump over here into our wins channel. We have a giveaway every month. This month we're giving away a watch. We have people sharing these awesome, awesome, awesome, awesome wins. We have a series of calls every week for people to get the support. We have what you can see over here is local chapters to get you connected to people locally. And we're pretty dang good at what we do. We've been around longer than more people with better results. We don't offer crazy guarantees because that's what puts people out of business and gets people roasted online. And if you actually see this plaque back here, one sec, my homies got this for me. I don't know if you'll be able to read it, but right here it says awarded King of Remote Sales for helping 100 sales reps get to $10K per month. The only problem is we're not quite there. We're almost there. If you go to my YouTube channel and look at a playlist called TSSC Member Interviews, you'll see that we're pretty close. We have like 70 interviews. They're not all $10K per month. Most of them are. And our goal is to help 100 people make their first $10,000 per month through a 1099 remote inbound sales job. So if you're interested in that, you want to do it full-time, you want to do it part-time, you just want to learn more, go down below to the 3rd link in the description, check out that page. And if you guys have any questions, again, I'm not a tax professional. Please don't take anything I said here as truth. Please consult with a tax professional if you need one. Go to the first link in the description. And if you're worried about not having the proper support. Like, you know, 1099 is for you, but you're afraid of commission only. You're afraid of the tax side of things. You're afraid of the health insurance side of things. Like, we have things in place to make this easier for you, to make this less scary and more predictable. And a lot of that comes down to getting on a good offer where you make the money that you think you're gonna make. We help people do that. So that's it for this video, you guys. Hopefully you have a better idea if 1099 versus W-2 is better for you. There's pros and cons to each. We just so happen to work on the 1099 side, but there's a time and place for each one depending on your unique situation. If you have any questions, drop 'em in the comments. I'm happy to answer. Otherwise, I'll see you guys next week.