Do You Know the Difference Between W-2 and 1099?
Hey, everyone!
I?m here to explain a bit more about the difference between W-2 and 1099.
These documents are simply income statements used to report payments to employees or independent contractors. The main difference between W-2 and 1099 is that with a W-2, all taxes have already been deducted from your paycheck.
This means you have already paid federal income tax, state income tax, Medicare, and Social Security.
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With a 1099, no taxes have been withheld from the income you earned throughout the year.
When tax season comes, you will need to pay those taxes.