What is the difference between a Form W-2 and a Form 1099-MISC?

Both of these forms are called information returns. The Form W-2 is used by employers to: • Report wages, tips and other compensation paid to an employee. €¢ To report the employee's income tax and Social Security taxes withheld and any advanced earned income credit payments.

€¢ To report wage information to the employee, the Internal Revenue Service and the Social Security Administration. A Form 1099-MISC is: • Used to report payments made in the course of a trade or business to another person or business who is not an employee. €¢ Required among other things, when payments of $10 or more in gross royalties or $600 or more in rents or compensation are paid.

€¢ Provided by the payer to the IRS and the person or business that received the payment. More.

Both of these forms are called information returns. There are approximately 30 different types of IRS information returns. The Form W-2 is used by employers to report wages, tips, and other compensation paid to an employee.

The form also reports the employee's income tax and social security taxes withheld and any advanced earned income credit payments. The Form W-2 is provided by the employer to the employee and the Social Security Administration. A person or business uses Form 1099-MISC to report payments made to a person who is not an employee or a business.

The form is required when payments of $10 or more in gross royalties or $600 or more in rents or services are paid. The payer provides the form to the IRS and to the person or business that received the payment. More.

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