1099 Paperwork vs. Company Sub-contract

In my book, I don't distinguish between being a solo 1099 and being a sub-contractor.

If it's just you, even if you have a registered LLC and all that, there isn't much of a practical difference in terms of the steps you'd take to get your first 1099 gig.

However, on occassion there are a few paperwork differences.

For example, I recently agreed to a new project with a prime I have never worked with before and I am bringing on an employee in addition to myself.

Initially, they just wanted to bring me on as a 1099. If that were the case, the paperwork would have been a single form that I signed and I could start right away, almost as if I were an employee.

But, because I wanted to do a formal sub-contract so I could bring on an employee, the paperwork was more extensive and the government has to approve a DD-254, which is form that authorizes my company to do classified work.

The sub-contract paperwork is now sitting on some government employee's desk waiting to get approved, which is of course, annoying. Like I've said before, everything takes longer than you'd like.

If you have the option of doing both, I'd suggest doing the straight 1099 thing if it's a faster process. You can ask the program manager.

However, if you want the possibility of bringing on employees and getting a Facility Clearance in the future on this particular contract, it'll save you a step to do it up front.

Want the full playbook? Check out Going 1099.