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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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cynthia   wrote on : Wed Jan 29th,2014   Back to Article

If you are already retired and are contracting through a firm for a 1 time temporary stent is it wise to ask for 1099. I am not sure about them withholding social security monies.

Reply :

Issue 1099 or Withhold Taxes on 1099

Dear Cynthia:

Normally, you do not withhold taxes if you are issuing 1099 to the subcontractor. If you are a subcontractor or subcontracting job to someone, make sure you have a written and signed contract along with the paid invoices, otherwise state and federal may declined your claims on your tax returns.

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