<prompt> Human: My boss told me that because the city takes a pretty large chunk of money from my paychecks that I should file a 1099 and by doing so they wont take out as much from my paychecks. Could someone explain this to me please?Update: Talked to my boss today and it seems that he completely unaware of how a 1099 differs from w2, and was more than glad to have me filed as a w2 again.  <response>: You can either be an employee of a company or a self-employed contractor.As an employee the employer withholds takes out from your pay check an amount for payroll taxes and an amount for income taxes. At the end of the year you file a tax return and pay or receive a refund for any income taxes due over the amount that was withheld from your pay.As a self-employed contractor, your employer gives you a chunk of money with nothing withheld from it. You are responsible for paying an estimate of your total taxes due in four quarterly payments throughout the year. At the end of the year you file a tax return and pay or receive a refund for any income taxes due over the amount you paid quarterly. At the same time they also collect your self-employment taxes, which are double the payroll taxes 15.3 compared to 7.65 that you would pay if you were an employee.Bottom line: boss is hiding one truth with another, youd get more in your paychecks but you pay more tax total over the year. 