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 Notice CP08 – Important Information About the Additional Child Tax Credit

You may be eligible for an additional child tax credit. Learn more about notice CP08 and how to handle it with help from the tax experts at H&R Block.

Tax Evasion

Failing to file a return is not necessarily considered tax evasion. Read the IRS definition and get more insight from the tax experts at H&R Block.

Withdrawal Penalty Exemptions

Are you exempt from a withdrawal penalty if you've been terminated from your job? Learn more about this important question and get tax answers at H&R Block.

4 CARES Act small business temporary assistance programs

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides several benefits for small businesses. Find out what it means from the experts at H&R Block.