Form 1099 online for 2016 taxyear

Form 1099-MISC & Independent Contractors

Question: What is the difference between a Form W-2 and a Form 1099-MISC?

Answer:

Although both of 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.
• Report wage and withholding information 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 Income, to:

• Report payments made in the course of a trade or business to a person who is not an employee or to an unincorporated business.
• Report payments of $10 or more in gross royalties or $600 or more in rents or compensation. Report payment information to the IRS and the person or business that received the payment.