Tax season is a time that not many of us look forward to. This is especially true for those who aren’t sure how to navigate their current tax obligations.
Fortunately, though, the federal government has pushed back the traditional April deadline to July 15th.
While it’s not too difficult to file a W2 or 1099 separately, it can be confusing at first if you need to file both within the same tax year. If you’re not sure where to start, how can you be sure you’re doing it correctly?
Let’s take a look at everything you need to know about how to file both a W2 and 1099.
What’s the Difference Between a W2 and 1099?
For traditional employees (whether they are paid hourly or salaried), their employer will send them a W2 form that details how much income they’ve made for that tax year. They also send a copy to the IRS in order to report the income and the taxes they’ve withheld.
You’ll fill out a 1099 form to report the income from a job that you did that wasn’t as a typical employee. This includes three main factors:
Payment for freelance graphic design work, for example, is considered a miscellaneous income since you decide how and when you work.
When you receive a 1099 form, however, you’re responsible for paying the taxes your employer would normally pay. This is a 15.3% rate that covers both Social Security and Medicare obligations.
Those who need to generate a W2 can use this printable W2 form 2019.
How Do I Handle Both in the Same Year?
The process isn’t as difficult as it may initially seem.
Since your taxes from your W2 are already withheld from your paycheck, you’ve already taken care of your tax obligations for that occupation other than filing on your own. Depending on how much you pay, you may or may not get a refund.
A 1099 form is used to handle income from miscellaneous sources throughout the tax year. Since you ‘re responsible for the tax obligations your employer would normally pay, it’s wise to set aside a percentage of your miscellaneous income as you receive it.
The type of 1099 you fill out will also depend on the source of your income. These include:
As long as you report the total income you’ve made (and the source it came from), you shouldn’t run into any issues.
Filing a W2 and 1099 in the Same Year Can Seem Difficult
It may seem confusing when you have these two different types of tax forms, but it doesn’t have to be.
With the above information about handling a W2 and 1099 together in mind, you’ll be well on your way toward making sure that you take care of all the tax responsibilities that you need to.
Want to learn more lifestyle tips that can help you out in the future? Be sure to check out the rest of our blog.