What tax obligation must a worker functioning as an independent contractor (1099 role) manage entirely themselves?
Paying all applicable self-employment taxes
When a worker functions as an independent contractor, often designated as a 1099 role, they are operating their own business providing services to a client company. A critical component of this self-employment status is the responsibility for managing all financial aspects related to their business income. This explicitly includes the obligation to calculate, withhold, and remit all applicable self-employment taxes directly to the relevant tax authorities. Unlike traditional employees who have taxes withheld by their employer, the independent contractor bears the full administrative and financial weight of these tax obligations, covering both the portions typically paid by an employer and an employee.
