My fiance works for a pool cleaning business as a technician for over a year now and his status is self-employed (he prepared his Form 1099 for my interview). My question is this: Is it possible to be self-employed but work for an employer? I am somewhat confused about the difference between W2 and Form 1099. Anyone who can shed light in this matter?Thanks!

You can be a contractor working for someone else. The person you work for doesn't pull out anything for taxes or unemployment tax, the contracter is responsible for paying all the taxes.

As an employee (W2), the employer pays taxes on the employee.

http://www.wisegeek.com/what-is-a-1099-form.htm explains it a lot better.

Your fiance is contractor. He may call someone he works for an 'employer' but technically he is not and your fiance in not an employee. The 1099 is the year end statement of money paid to him (no tax taken out) from clients he did work for. If he is filing taxes as a sole proprietor, there will be no W2. He still has to file a 1040 like everyone else. Make sure he sends you that along with other forms he should be filing like a schedule C etc...