Tuesday, February 14, 2017

IRS Form 1099 Or Form W-2?

Some people ask '1099 or W-2?' as if they were asking how you take your coffee. With all the tax forms coming these days, it's good to remember the difference. Form W-2 is for employees, and includes details about tax withholding, remittance to the IRS and state taxing authorities. In contrast, Form 1099 reports payments to independent contractors. Any Form W-2 or 1099 you receive also goes to the IRS. IRS uses Forms 1099 for easy computer matching of Form 1099 data against tax returns. But how do you know which form? We'll come back to that question.

The deadline is Jan. 31 for mailing Forms 1099 to taxpayers, but the payer generally has until the end of February to send all its Forms 1099 to the IRS. This year (2017, for 2016 payments), the IRS moved up the filing date for Forms 1099-MISC reporting non-employee compensation in box 7. The reporting date to the IRS for those forms is January 31, the same as the due date for forms to be issued to recipients. If there is an error on a Form 1099 tell the payer immediately.



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