An independent contractor (IC) is a self-employed worker who provides services to clients or platforms but isn't an employee. ICs receive payment without tax withholding, get Form 1099-NEC or 1099-K at year-end, and are responsible for all their own taxes including self-employment tax.
Characteristics of independent contractor status (per IRS common-law test and the FLSA "economic reality" test):
- Sets own hours and decides which jobs to accept
- Provides own equipment and supplies
- Can work for multiple clients/platforms simultaneously
- Bears profit/loss risk (lower fares = lower pay, no minimum wage protection)
- Not under continuous employer supervision
Common 1099 gig roles: rideshare drivers (Uber, Lyft), food delivery (DoorDash, Uber Eats, Grubhub, Instacart shoppers), freelance bartenders/caterers, hairstylists who rent a chair, Wonolo/Instawork shift fillers.
The pros: business expense deductions (mileage, supplies, phone, home office), schedule flexibility, ability to write off SE tax half. The cons: no employer-paid FICA match (you pay 15.3% yourself), no unemployment insurance, no workers' comp, no employer-sponsored health insurance, no paid time off.
Misclassification (employer treating you as 1099 when you're really an employee) is illegal and increasingly enforced. See misclassification.