Form 1099 Misc is not the same as form W2

It’s the year end payroll filing season and you wondered why your company gives few people form W2 and to other it gives form 1099 misc? Well, Simple answer. Some people in the company are permanent employees and others are employed on a contract basis. What I mean to say is that if you receive form W2, it gives you the status of being a permanent employee of the company and if you receive form 1099 misc it suggests that you are self employed and your services are hired by the company on a contractual basis.

                                         

Businesses Report the income of their employees on Form W2. This form reports total income, Social Security and Medicare Income, and it reveal how much has been withheld from employee pay for federal, state and local taxes. Form W2 is given to the employees no later than January 31^st. Businesses have to efile form W2 of its employees with the IRS by March 31^st 2012 (As the filing deadline falls on Saturday, hence the IRS has changed the filing deadline to April 2^nd 2012). If you want to file through paper then the last date is February 29^th 2012. However, it is always advised that you opt for Efile over paper filing not because IRS recommends it but compared to paper filing, efiling is not at all complex but rather quick, and secure and IRS confirmation is sent via secure email in less time.

Unlike form W2, 1099 misc form is given by businesses to individuals whose services is hired for a short period of time on contract basis. Such individuals are called as independent contractors. Independent contractors are those individuals who do work for your company but who are not employees. You don't report withholding or Social Security/Medicare wages because you don't withhold income taxes for independent contractors and you don't deduct Social Security and Medicare from their payments. Businesses have to file form 1099 misc for independent contractors if income of $600 and above has been paid to them. 1099 misc has to be given to individuals no later than January 31^st 2012. 1099 forms have to be electronically filed with the IRS as well no later than April 2^nd 2012. Paper filing option is also open for which the last date is February 28^th 2012. However, it is always advised that you opt for Efile over paper filing not because IRS recommends it but compared to paper filing, efiling is not at all complex, quick, and secure and IRS confirmation is sent via secure email in less time.

Moreover, you can file electronically through the Filing Information Returns Electronically System (FIRE System); however, you must have software that can produce a file in the proper format according to Pub. 1220…It’s not that simple to use that software without any guidance. There are service providers for 1099 online filing but they only offer you the option to download the software and use it. That can be very complicating process and not a reasonable one. But one such IRS certified efile service provider that I came across is 1099online.com. You can efile and submit form 1099 Misc and other 1099 forms without having to download any software and without having any know about technicalities. 

So now that you know the difference between tax 1099 misc and form W2, you can know better which one is for you and why.

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