What’s the difference between 1099s and W2s?
Who needs a 1099?
- Form 1099-NEC is for reporting non-employee compensation (those 1099 workers we’ve already mentioned).
- Form 1099-MISC is for reporting miscellaneous income such as rent or payments to an attorney.
Does it matter how I paid?
- If you paid via check, cash, or other direct payment, you are required to issue a 1099.
- If you paid via Zelle, Venmo, or CashApp, you are required to issue a 1099.
- If you paid by credit card, you are not required to issue a 1099.
- If you paid via PayPal, you are not required to issue a 1099 because PayPall will issue them one. (Note: If you paid via PayPal’s Friends and Family option, you are required to issue a 1099.)
- If you paid through a service like Fiverr or Upwork, you are not required to issue a 1099 because those services will issue one.