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
Related Resources
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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.
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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.