What is a W-2?
The W-2, also known as the Wage and Tax Statement, is an IRS tax form that employers must complete and send to employees and to the government. The form includes information like the amount of wages paid, taxes withheld, and other benefits provided. The W-2 form is used for employees holding full-time positions that receive benefits.
What is a 1099?
The 1099 is a collection of tax forms that are used for documenting income. If you’re a freelancer, contractor, or other worker who isn’t a full-time employee with benefits, then you’ll likely receive a 1099. The main difference compared to W-2 is that in 1099 forms, there are no taxes withheld. You are responsible for withholding taxes yourself or paying the taxes you owe at the end of the year. If you’ve made more than $600 from a source, then you must pay self-employment tax and whoever paid you should complete and send a 1099 to you and the government.
The deadline for receiving both forms discussed above is generally January 31 for the prior tax year.