Difference Between W-2 Form and 1099-NEC
Are you a business owner and running a business in the United States? You are supposed to file your annual wages to those who work for your business and that details must be reported with the Social Security Administration (SSA) and the Internal Revenue Service (IRS) as well. Once you determine whether someone who works for your company is an employee or an Independent contractor you will get to know which reporting form to give that individual. Employee vs Independent contractor To Reduce confusion, the IRS published some criteria to determine whether an individual needs to file Form W-2 or 1099-NEC. If a business owner hires an individual and pays wages, tips, and other compensation for a tax year they are supposed to report Form W-2, or If a business owner paid more than $600 for an independent contractor in a tax year then they have to file Form 1099-NEC . W2 Form: IRS Form W-2 is used to Report employee’s annual wages and the amount of tax...