Q:

If I had option to choose between 1099 and W2 for my job, which should I choose?

The only thing I know about the difference between 1099 and W2 is when you work as 1099 you don't pay taxes whereas W2 has to pay taxes for every paycheck I receive. As 1099 employee, I would have to pay big amount of tax at the end of the year. 
So I thought it comes down to my preference of paying big amount of tax at one instance, or pay small amount of tax periodically. For which I would definitely prefer to be W2 employee and pay what I have to pay anyway from my paychecks. 
Other than this difference, why should I work as 1099 or W2 employee? What are some factors that could benefit me from working 1099 rather than W2 or vice versa? 

A:

The important thing to realize is that as 1099 worker you are not really an employee. Instead, you are self-employed with your own business, and your "employer" is really your customer.  There are several implications to this fact. 
The company you are working for will be paying you money, but will not be giving you any benefits: no health insurance, no vacation or holiday pay, no retirement plan, etc. You are responsible to provide all of these things for yourself. 
The company you work for will not be paying any taxes for you, so you are responsible for paying all taxes yourself. This includes sending income tax payments in to the IRS quarterly. Employers pay part of the payroll tax for their employees, but since you are self-employed, you need to pay all of it yourself. 
There are other expenses related to having your own business that you might need to pay. For example, depending on your line of work, you might need to carry workers compensation or liability insurance.
All of this complicates your taxes quite a bit. If this sounds too complicated, you will want to find an accountant that can help you figure out what you need to do regarding paying your taxes and deducting business expenses. 
When business slows down for an employer, often it is the contractors that are let go before the W-2 employees. Job security can be riskier as a contractor. 
Having your own business can be rewarding, but is riskier and more complicated than being an employee. 

A:

As others have said, which is better depends on your particular circumstances. 
From my own experience, if you work for a single employer, on site, I think you're better off as a W2 employee.  (And could wind up being classed as one if the IRS ever audits you - their instructions have a number of tests you need to meet.)  If you work mostly from home, and have several different clients that you do work for (or potentially could have), you are probably better off as 1099, since you can deduct many expenses - home office, equipment, occasional trips to client sites (but not daily commuting), and more.
You do have to pay taxes, which (barring the deductible stuff, which your employer would be paying for if you're a W2) are going to be the same either way.  As a W2, you have taxes withheld with each paycheck, so no hassles on your part.  As 1099, you need to file quarterly estimated taxes, which if your income is irregular, can be a bit of a pain.  If you don't pay enough to cover your tax due* when filing your 1040, you will be subject to a penalty.
One other problem - the "Bernanke Trap" - might surface if you're thinking of getting or refinancing a mortgage.  Mortgage companies are a lot more willing to lend if you can show W2 income, even if that income is a lot less than your 1099 income.
*There are "safe harbor" provisions, which IIRC are either 90% of this year's tax, or 100% of last year's.  Check the IRS instructions to be sure.

