Status Type

Meaning

Tax Implications

Independent Contractor (IC):

ESG's Independent contractors are incorporated and act as a separate legal entity. ESG places ICs on assignments, but is not considered the employer. Invoices must be submitted to ESG for services rendered in order to receive payment.

ICs must pay their own federal and social security taxes (You must file 1099 miscellaneous income forms (if over $600)). As an incorporated independent contractor, you will have your own tax id.

W-2 (or contract professional):

With W2 consultants, ESG places you on payroll to work on a specific project. ESG reports your income to the IRS on a W2 form. As a W2 employee, you receive a regular paycheck from which ESG withholds all federal, state, and local taxes. You file regular state and federal tax returns, just as you would if you were a staff employee. Almost always the contract can be terminated at will.

ESG withholds taxes for you, you do not need to pay these taxes yourself or file a 1099.