What’s the difference between a 1099 and W-2?
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
What triggers the IRS to audit a tax return? Learn how common tax mistakes and errors can be a red flag and affect your chances of being audited by the IRS.
Find the current percentages for federal income tax rates, capital gains tax rates, Social Security tax rates and more from the tax experts at H&R Block.
The key to understanding your w-2 form is decoding the boxes and numbers. Learn how to read your w-2 form with this box-by-box infographic from H&R Block.
The tax experts at H&R Block outline how students and parents can file Form 8863 and document qualified expenses. Read about Form 8863 here.