I am currently working as a W2 employee for my prime consulting company. When asked them to increase my pay they said if you come to us in 1099 they can provide me more than what they will be increasing my pay . Now I am confised to what should I do.

1. Should I register single owned LLC? They dont take any tax at the beginning but i think i should pay at the end of the year or quarterly. Is it true?
2. I dont have any benifits provided by my company as W2 , I pay my own insurance, no vacation , i make my own vacation days through comp hours (DBA has lots of comp hours :) )

What do you think is best? Any suggestion or any LLC holder advise would be great help here..

Mikel (Chalauchha Cycle)