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Quick question:

Under what circumstances would a person get a 1099 instead of a W2 from a job? What dictates if you even receive a form from a job at the end of a year?

Thanks;

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Under what circumstances would a person get a 1099 instead of a W2 from a job?

W-2s are for employees. 1099-MISC, box 7, is for an independent contractor. The difference is one of facts and law. You are not free to pick and choose which you will be.

What dictates if you even receive a form from a job at the end of a year?

W-2s are required from basically the first dollar of income. (In the back of my mind I'm thinking the threshold is $10, but I couldn't swear to it.) 1099s for non-employee compensation are generally required when a business pays more than $600 to a non-employee for services.

--Peter
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W-2s are required from basically the first dollar of income. (In the back of my mind I'm thinking the threshold is $10, but I couldn't swear to it.)

There is no floor for FICA/Medicare and W-2 issuance. They apply from dollar one.

Phil
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There is no floor for FICA/Medicare and W-2 issuance. They apply from dollar one.

Thanks, Phil. I guess my mind is mixing up the interest and dividend reporting thresholds.

--Peter
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I work short assignments at hospitals.
Often, they DO NOT want me to be their "employee", as this means
a. they are legally responsible for my actions
b. various headaches such as with-holding, FICA contributions,etc.
c. including me in certain benefits (health, etc) other employees receive

So they simply give me a "Form 1099", upon completion of the assignment, which lists the agreed upon payment; e.g., if it is $100/hour, and I work 10 hours, it is for $1,000.
Period. No dedcutions, etc.
Simpler, and less paperwork, accounting, and liability on their part.
RJB
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RJB: giving you a 1099 is better for the hospital but not necessarily for you. No income tax has been deducted from your pay so you will have to come up with that money at tax time. Also you will pay more social security taxes as you are self employed now. The one thing in your favour is being self-employed gives you an opportunity to deduct certain expenses related to work that an employee cannot deduct.

Keep your receipts and also keep a log book for mileage for your car. You may not be able to claim mileage but in any case it is better to have the information ready just in case.

If you are earning enough money you may have to consider making estimated payments. The government wants their tax money contributed evenly throughout the year and if they are not getting it from payroll taxes you should be contributing it through estimated taxes.

Andy
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