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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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Jerry Amico   wrote on : Wed Jul 24th,2013   Back to Article

Are wages earned as a 1099 contractor included in the social security "Taxed Social Security Earnings"? Since we pay the SS tax it seems they should be included but appear to not be included. This is important to determine our SS benefit upon retiring.

Reply :
Jerry Amico:

Thanks for choosing for your business needs. Yes, 1099 compensation also considered earned income and paid social security taxes shall be considered.

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