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The difference between a Form w-2 and a Form 1099-MISC or Form 1099-nec
Feb 15, 2022
Understanding the difference between a Form w-2 and a Form 1099-MISC or Form 1099-nec
Although these forms are called information returns, they serve different functions.
Employers use Form W-2, Wage and Tax Statement to:
- Report wages, tips, and other compensation paid to an employee.
- Report the employee's income and social security taxes withheld and other information.
Employers furnish the Form W-2 to the employee and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service.
Payers use Form 1099-MISC, Miscellaneous Information or Form 1099-NEC, Nonemployee Compensation to:
- Report payments made of at least $600 in the course of a trade or business to a person who's not an employee for services (Form 1099-NEC).
- Report payments of $10 or more made in the course of a trade or business in gross royalties or payments of $600 or more made in the course of a trade or business in rents or for other specified purposes (Form 1099-MISC).
- Report payment information to the IRS and the person or business that received the payment.
You can read more by clicking here. If you live in the DFW area and would like to schedule a consultation with an IRS Lawyer in Dallas, call my office at (469) 626 7760.
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