Differences Between Filing with W-2 and 1099

When filing taxes in the U.S., it’s crucial to understand the difference between W-2 and 1099 forms. The way you work and receive payments will determine which form you get and how it impacts your tax return.

What is a W-2?

A W-2 form is issued by an employer to employees who are on payroll. This document shows annual earnings, as well as federal, state, and Social Security taxes withheld by the employer.

📌 If you receive a W-2:
✔️ Your employer withholds taxes automatically from your paycheck.
✔️ You may qualify for tax credits and refunds.
✔️ You have access to employee benefits such as health insurance and retirement plans.

What is a 1099?

A 1099-NEC or 1099-MISC form is used for independent contractors, freelancers, and gig workers. In this case, individuals receive gross income without tax withholding, meaning they must calculate and pay taxes on their own.

📌 If you receive a 1099:
❌ No automatic tax withholding.
❌ You must pay estimated quarterly taxes to the IRS.
✅ You can deduct business-related expenses (transportation, equipment, etc.).

📢 Key Difference?
The biggest difference is that a W-2 employee has taxes withheld automatically, while a 1099 worker is responsible for their own taxes but can claim specific deductions.

📞 Not sure how to file your taxes? At Viera Services, we help you file correctly and maximize your benefits. Call us today!

📍 Gainesville: +1 470-846-6232 | (770) 287-7745
📍 Cornelia: +1 706-778-6478