Here's an IRS link that may help.
[link|http://www.irs.gov/faqs/page/0,,id%3D15917,00.html|Form 1099-MISC] income.
When you get a W-2 you were an employee, you pay FICA (Social Security) and Medicare payments and your employer pays matching amounts. You would pay half of the combined rate shown in next paragraph. The employer deducts your portion of these taxes as well as income taxes every time you are paid. The employer also pays FUTA (towards unemployment funds) and likely even more to the state for similar purposes. The unemployment taxes are not high. For my company in North Carolina it was ~1%.
When you get a 1099, you were a contractor and are responsible for all FICA and Medicare the taxes (15.3% up to $84,900 plus 2.9% for income above $84,900). You file a 1040 Schedule SE (Self-Employment Tax) form as part of your annual tax return. But half of this tax feeds back as a deduction on your 1040, so your actual rates may be lower. Like any deduction, it's value depends on your marginal* income tax rate. With a 1099 you would have to pay quarterly estimated taxes including the Self-Employment taxes.
*The marginal tax rate is the rate that one more dollar of income would be taxed. If your income is low enough it could be 0. But 25% may be typical for someone like you, i.e. married, filing jointly.
So, you figure it out. You'd pay 7.65% with W-2. You'd pay about 13.4% with a 1099 on 14% more income. It's more paperwork, but I'd take that 1099.
Of course, I am assuming no benefits with the W-2 case, e.g. no vacation/holdays, medical insurance, etc.
WARNING: I am not a tax accountant!
Alex
"Don't let it end like this. Tell them I said something." -- last words of Pancho Villa (1877-1923)
