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

IRS Information & Tax Forms

Get IRS information including instructions and tips. H&R Block is home to numerous IRS tools and resources, letting you file with confidence.

Alternative Minimum Tax Thresholds| H&R Block

What is the alternative income threshold for your earnings bracket? Learn more about this important part of your tax return today.

IRS Error (Penalty Abatement)

Get the facts about penalty abatement due to an IRS error. Read the IRS definition and get more insight from the experts at H&R Block.

Form 1099

Learn more about the different types of 1099 tax forms with the experts at H&R Block. Find out if you will receive 1099 forms from employers or investment companies.