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How do I know whether to issue a W-2 or Form 1099-MISC to someone who works for my business?

As a business owner, you're required to provide your employees with your W-2s on or before Jan. 31 of the year following the payment of their wages.

You're required to provide independent contractors you pay Forms 1099-MISC. You must provide Form 1099-MISC:

  • On or before Jan. 31 of the year following the year you made the payments
  • To any independent contractor you paid at least $600 in the tax year

Usually, workers who perform services for you are considered your employee if you can control:

  • What will be done
  • How it will be done

This applies even if you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.

Workers in business for themselves usually aren't employees. However, the determination depends on the facts in each case.

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