A 1099 contractor is an independent contractor required to have contracts for each project they are on, Worker comp, Liability insurance and handle there own taxes. In some states a contractor’s license is required depending on the size and scope of work.
The difference in tax liability comes into play depending on the type of company you form. If you are a sole proprietor your profit is taxed as income ad you pay your taxes quarterly as any employer would. If you start an LLC to protect your personal assets and you are the only owner of the LLC you are taxed the same way. Once you form a partnership or corporation then the tax structure becomes more complex.
I could go into more detail but I don’t know if any one really wants to go into that detail here.
