Question

What’s the difference between a 1099 and W-2?

Answer

Regarding the difference between a 1099 and W-2, if you received a W-2, you’re considered an employee. A W-2 reports these:

  • Wages, tips, and other compensation paid to an employee
  • The employee’s income and Social Security taxes withheld and other information
  • Wage information to the employee and the Social Security Administration

You should report the information on the W-2 under wages.

If you received a Form 1099-MISC, you’re considered an independent contractor.

Form 1099 reports payments made in a trade or business to either of these:

  • A person who isn’t an employee
  • An unincorporated business

This form is required when payments of either of these are made:

  • $10 or more in gross royalties
  • $600 or more in rents or compensation

Related Topics

Related Resources

Form 1099-INT, Interest Income

If you receive $10 or more in interest, you will receive a Form 1099-INT showing the amount you received and taxes withheld. Learn more from H&R Block.

Tax Return Less Than Expected

Discover why the tax refund you got is less than expected or different from what was shown when you filed. The tax experts at H&R Block explain further.

IRS Notice CP30A – Your Estimated Tax Penalty Has Been Reduced

Learn more about notice CP30A, why you received it, and how to handle the notice with help from the tax experts at H&R Block.

IRS Letter 2050 – You Have Overdue Taxes or Tax Returns

Learn more about letter 2050, why you received it, and how to handle an IRS bill for unpaid taxes with help from the tax experts at H&R Block.