On a 1099 contract, you will be able to get a higher hourly rate and you must file your own taxes.  You will also be eligible to write-off more work-related expenses.

1099 Pros:

• Easy to get started.
• Easy to discontinue when your contract ends.
• Losses can be used to offset other income (limits apply).
• Small business retirement plans offer the opportunity to defer a more current income than traditional IRAs.
• You might be eligible to take the Home Office Deduction.

1099 Cons:

• Unlimited liability for the owner.
• All profit is subject to self-employment tax in addition to the income tax.
• More administration and bookkeeping than W-2 option.
• You must make quarterly estimated tax payments.