Ok, I was recently offered a job paid cash. But for my health insurance I have to have proof of employment. So my possible boss said that we can do a 1099. I am not exactly sure what the deal is with a 1099. I have heard many different things, good and bad, about it. He said that I can use it for my insurance but he will not submit it. So my question is do I still pay taxes? And does this in the end cost me more?

Being paid under a Form 1099 causes YOU to pay BOTH sides of the Social Security and Medicare taxes, and there is NO tax withholding, so you could be caught in a bind come tax time. That the BAD side.

The GOOD side is that you can claim all kinds of expenses associated with your work, like computer, Internet and cell phone costs.

It is a fine balancing act if you work under a Form 1099, so be careful.

1099-Misc income means that you are an independent contractor or a self employed person. You will report your income on schedule C (Form 1040). Your net income is subject to SE taxes.

How you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 or 1099: Employee or Independent Contractor. (http://taxipay.blogspot.com/2008/03/w2-or-1099-employee-or-independent.html)