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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.

Form W-2 (PDF) is used by employers to:

  • Report wages, tips and other compensation paid to an employee.
  • Report the employee's income and social security taxes withheld and other information.  See General Instructions for Forms W-2 and W-3 (PDF) for more information.
  • Report wage information to the employee, and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service. 

Form 1099-MISC (PDF) is:

  • Generally used 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.
  • Required when payments of $10 or more in gross royalties or $600 or more in rents or compensation are made.
  • Provided by the payer to the IRS and the person or business that received the payment.

Additional Information:


Category: Small Business, Self Employed, Other Business
Subcategory: Form 1099 MISC & Independent Contractors

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
SE:W:CAR:MP:T:T:SP
1111 Constitution Avenue NW
Washington, DC 20224