Self-Employed 1040 vs 1099 (What Are the Form Differences?) | TurboTax Blog Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Brie Weiler Reynolds Modified Nov 17, 2020 3 min read Depending on the industry, employees and freelancers may seem to do similar work, but their exact roles, their connections with a company, and their tax status are all very different. Naturally, this affects how a person might complete and return his or her taxes. If you’re wondering about the differences between tax forms 1040 and 1099, this primer is for you. 1040 vs. 1099: What the Numbers Mean The simplest explanation for the numbers 1040 and 1099 being used to refer to employees and freelancers is…taxes. Form 1040 is the individual income tax form that most professionals are familiar with. Employees and independent contractors alike are required to complete and submit a 1040 tax form every year by the tax deadline. Form 1099-Misc, on the other hand, refers to the form a person receives when they’ve been paid as a self-employed individual (a.k.a. an independent contractor, consultant, contract-to-hire, etc.), you should receive a 1099 from any client who paid you for your work during the tax year if it was more than $600. Even if you didn’t make over $600 in self-employment income and didn’t receive a 1099-Misc you should still claim your self-employment income. The employee-equivalent of a 1099- MISC form is a W2. People who work as employees of a company should receive a W2 that shows their annual income, tax withholdings, etc. clearly filled out. Just like 1099 income, income from W2s is reported on the Form 1040. Employee and Freelancer: What’s the difference? If you’re not sure of your tax status when it comes to the work you’re doing, it’s important to find out. A company should classify you either as a freelancer or an employee, and send you the corresponding forms when it’s time to do your taxes. The IRS says the most important factors to consider when deciding if you’re a freelancer or an employee (or when your company is deciding this) are: control and independence. The IRS asks companies to take into consideration these two key components when deciding whether any of their jobs should be classified as employee or freelance jobs.What does that mean for you? You’re probably a freelancer if… You control the choice of what work you do, and how you do your job You set your pay rate, bill for completed work, buy your own office supplies, and control other related aspects of your work You do not receive benefits like insurance, vacation time, or pensions You receive one or more 1099 forms at the start of tax season You’re probably an employee if… Your schedule is more or less set by your employer, and you do work assigned to you by an employer or manager Your pay rate is determined by a manager or company, you don’t submit bills for work completed, and your employer/manager provides things like office equipment You do receive benefits like insurance, vacation time, or pensions from an employer You receive one or more W2 forms at the start of tax season The Bottom Line: 1040 vs. 1099 If you made any income in the last year, you’ll need to file a Form 1040 with the IRS. And on that form, you’ll include income from any freelance (1099) jobs and employee (W2) jobs you’ve held. Don’t worry about knowing tax forms or tax laws. TurboTax will ask you simple questions about you and give you the tax deductions and credits you are eligible for based on your answers. If you are self-employed you can use our new TurboTax Self-Employed which allows you to organize, categorize, and uncover tax deductible business expenses. It even will help you to separate business and personal expenses. Previous Post How To Manage Your Self-Employment Deductions Year Round Next Post 4 Surprising Ways to be Self-Employed Written by Brie Weiler Reynolds Brie Weiler Reynolds is the Senior Career Specialist at FlexJobs, the award-winning site for telecommuting, flexible schedule, and freelance job listings. She aims to provide practical information and resources to help people overcome their roadblocks and discover career happiness. With a background in human resources and career advising, Brie has 12 years experience working with job seekers and employers, and she offers career, hiring, and work-life balance advice through the FlexJobs Blog and media outlets like Fast Company, Forbes, and NBC News. Find Brie on Twitter, @briewreynolds. More from Brie Weiler Reynolds One response to “1040 vs 1099 (What Are the Form Differences?) | TurboTax Blog” I am a employed Carpenter. I use my own truck, gas, and tools etc… for my work. Can I deduct business expenses being an employee? Reply Leave a Reply Cancel reply Browse Related Articles Self-Employed How to File Self-Employment Taxes (Understanding the Fo… Tax Planning You May Still Be Eligible To File Your Taxes for Free! Tax Tips 1098 vs 1099 forms Explained (Difference Between These … TurboTax News TurboTax Free Edition. Free Federal. Free State. 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