H&R Block

1150 E COLFAX AVE. DENVER, CO 80218-2104
303-864-0466

H&R Block

13693 EAST LLIFF AVENUE SUITE 100 AURORA, CO 80014-3176
303-745-5300

Difference between w2 and 1099

A W2 employee is an employee whose taxes are withheld by the employer and whose earnings are reported to the IRS at the year-end via a W2. The W2 employee completes a form W4 at the beginning of their employment to instruct the employer on how to withhold taxes.

A 1099 employee is in most cases a temporary employee (technically, not even an "employee"). Because they are not permanent, they do not need to complete a W4 or have the employer withhold taxes. They are responsible for paying their taxes directly to the IRS. The IRS requires that the employer report the earnings paid on a form 1099. The IRS would rather put the burden of tax withholding on the employer and therefore has fairly stringent rules regarding when someone can be considered a 1099 employee.

IBSN Inc(Tax Planning & Tax Preparation)

303 369 1010
contact@myibsn.com