Which form reports wages paid by an employer to an employee?
AnswerW-2
Employers issue W-2s to employees for wages.
Money · Facts & stats
1099 facts & stats
7 fact-checked facts about 1099 tax form basics and independent contractor terms, each with the reason behind it. 5 more are in today's round and join this page after it closes.
The basics
Freelancers who receive 1099-NEC forms are typically classified as what?
AnswerIndependent contractors
Nonemployee compensation goes to independent contractors.
Going deeper
In Form 1099-NEC, what does 'NEC' stand for?
AnswerNonemployee Compensation
1099-NEC reports payments to nonemployees for services.
What is Form W-9 used for?
AnswerGiving your taxpayer ID to someone who will pay you
Payers request a W-9 to prepare 1099s.
Self-employment tax funds which two programs?
AnswerSocial Security and Medicare
It is the self-employed version of Social Security and Medicare taxes.
Expert level
Form 1099-NEC was reintroduced starting with which tax year?
Answer2020
Starting with tax year 2020, nonemployee pay moved from 1099-MISC to 1099-NEC.
What is the combined US self-employment tax rate on net earnings (before any wage cap)?
Answer15.3%
It combines 12.4% Social Security and 2.9% Medicare.
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