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Difference between W-2 (Wages) and 1099

A W-2 form is an earned income statement containing a detailed set of information, including your total income (wages, tips, commission) and the amount of federal, state and social security taxes that have been withheld. Your W-2 is the most important document you need for filing your taxes. Working on a 1099 basis actually means that you are working as a true Independent Contractor under the IRS rules. You work on a 1099 basis when you are self employed such as a sole proprietor or as a corporation. Your clients will report the monies they pay you to the IRS on a 1099 form.
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Dave Lynch   wrote on : Thu Dec 27th,2012   Back to Article

This is my first year in the consulting business in which I've had a profit. I was wondering if the 1099 "amount" for my consulting fee only includes the amount sent in a calendar year. If money is not sent till 2013 (e.g. work accomplished in Dec 2012 but money for work accomplished is not received till Feb 2013) - will that be a 2013 "income" vice "2012".

Reply : infotaxsquare.com
 
Dear Dave Lynch:

Thanks for choosing InfoTaxSquare.com for your business needs. If, you have chosen accrual accounting method then it has to be reported for year-2012 and if you have adopted cash accounting method then you can report it when you actually received.

You can also use the following link to read more about our services.

http://infotaxsquare.com/e-book/book-view.php


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