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HelloIs it legally to pay the same employee w-2 and 1099 at the same time?

Forum|Forum|2 years ago
November 5, 2023
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QuickBooks Self-Employed

Best answer by Rubielyn_J

Hi there, Samar. Thanks for posting your concern here in the Community forum.

It is within legal parameters to compensate an employee with both a W-2 and 1099 at the same time.

Self-employed individuals often have dual employment arrangements, where they work for an employer as a formal employee in addition to their self-employment. In such cases, they receive a W-2 form to report their income from this employment.

When working as an independent contractor, it is typical for the client or employer to not withhold taxes from your payments. This means that you are responsible for managing your own tax withholding and making tax payments. The total amount you earned will be reflected on your 1099-MISC form, as it does not include any tax deductions.

If you would like to explore the topic in more detail, I suggest reading this article for a comprehensive overview: File taxes when you have both 1099-MISC and W-2 income.

Commencing in tax year 2023, the IRS has issued revised guidelines regarding electronic filings and corrections. Take a few moments to review this resource and become acquainted with the alterations that have been made: Understand the IRS regulations for filing 1099s and W-2s.

The information provided should have alleviated any concerns you have with W2 and 1099 forms. If you have any further questions or need additional assistance, please don't hesitate to ask. I'm always around to help you.

Rubielyn_JAnswer

Hi there, Samar. Thanks for posting your concern here in the Community forum.

It is within legal parameters to compensate an employee with both a W-2 and 1099 at the same time.

Self-employed individuals often have dual employment arrangements, where they work for an employer as a formal employee in addition to their self-employment. In such cases, they receive a W-2 form to report their income from this employment.

When working as an independent contractor, it is typical for the client or employer to not withhold taxes from your payments. This means that you are responsible for managing your own tax withholding and making tax payments. The total amount you earned will be reflected on your 1099-MISC form, as it does not include any tax deductions.

If you would like to explore the topic in more detail, I suggest reading this article for a comprehensive overview: File taxes when you have both 1099-MISC and W-2 income.

Commencing in tax year 2023, the IRS has issued revised guidelines regarding electronic filings and corrections. Take a few moments to review this resource and become acquainted with the alterations that have been made: Understand the IRS regulations for filing 1099s and W-2s.

The information provided should have alleviated any concerns you have with W2 and 1099 forms. If you have any further questions or need additional assistance, please don't hesitate to ask. I'm always around to help you.

S

Samar HadhoudAuthor

Many thanks. That makes my life easier.

Have a wonderful day.

Rainflurry

@Samar Hadhoud

When our businesses went through a payroll audit, I asked this very question to our state auditor. Her response was that you can only treat a W-2 employee as a 1099 contractor if they are providing a service to your business that requires specialized training and/or equipment. For example, treating an employee as a contractor because they provide cleaning services probably is not acceptable because any employee could provide that service.

I have had a couple of businesses where we had employees who also worked for the business as 1099 contractors. In one case, it was an employee that provided graphic design services and in the other, it was an employee that provided photography services. In both cases, the employees had specialized training and equipment for it so they could be treated as 1099 contractors (and they had separate businesses for these services).

S

Samar HadhoudAuthor

Thank you very much for the preciouses information you provided to me. This will help me a lot in my business.

G

GenmarieM

You're most welcome, Samar.

I'm glad to hear that the information provided by my colleague helped address your concern.

I'll add this article as a guide in filing taxes with QuickBooks Self-Employed: QuickBooks Self-Employed annual tax guide.

I'd love to hear more from you if you have additional queries about your tax forms. I'll be right here to assist you.

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