The W-2 Form Alternatives
- 17 January 2023
The W-2 form is a tax form used to report an employee's annual wages and the amount of taxes withheld from their paycheck. Employers must send copies of the W-2 form to the employee and the Internal Revenue Service (IRS) by the end of January following the tax year.
However, alternative forms may be used in place of the W-2 form depending on the circumstances:
- Form 1099-MISC
One alternative form is the 1099-MISC. This form reports income earned by self-employed individuals, independent contractors, and non-employee workers. It is similar to the W-2 form in that it reports the individual's total income for the year, but unlike the W-2, it does not report taxes withheld. Instead, the individual is responsible for paying their taxes through quarterly estimated tax payments. - Form 1099-NEC
Another alternative form is the 1099-NEC. This form reports non-employee compensation, like payments to independent contractors, starting in tax year 2020. It's similar to 1099-MISC but used specifically for non-employee compensation. - Form 1099-K
A third alternative form is the 1099-K. This form is used to report income earned through electronic payment transactions, such as credit card payments, PayPal, or other online payment platforms. It is used to report the total amount of income earned through these methods, and like the 1099-MISC, it does not report taxes withheld.
