When running a business, there’s never a shortage of to-do items, especially when it comes to year-end. An important aspect as you close out 2019 and enter 2020 is your employer-employee relationship and how you are handling payments to those individuals.
Difference Between W-2 & 1099
It’s important to understand the difference between a 1099 vs. W-2 form and who receives them. These forms deal with the relationship between an organization and the person performing work for that organization.
If the individual is considered an employee, your organization is required to withhold payroll tax. These individuals receive Form W-2.
If the person conducting the work is considered an independent contractor, withholding payroll tax is not required. Independent contractors receive Form 1099-MISC.
Learn more about the difference.
What Is a W-2 Employee?
If you have employees, then it’s vital you understand what a W-2 is and why it matters. The Wage and Tax Statement (Form W-2) is an information return form that reports on an employee’s yearly wages and the amount of tax withheld. Companies are required to provide this form to their employees come year-end.
Our W-2 eBook has what you need to understand, and correctly fill out, a W-2 for each of your employees. The book includes:
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