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    ellefilly's Avatar
    ellefilly Posts: 1, Reputation: 1
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    #1

    Sep 30, 2010, 07:12 AM
    What are the requirements to classify a worker as a 1099 instead of a w4?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Oct 2, 2010, 07:35 AM

    A W-4 is filled out by a newly hired employee to determine the number of exemptions the employee has, which determines the amount of taxes an employer will withhold from an employee's paycheck. Also it is filled out by an employee that is changing his or her filing status such as; from being single to married, having a child, etc...

    A 1099 is sent from a company to certain employees or individuals for certain types of payments the were paid by the company for the tax year. One example is a 10099-R is used for pensions and another example is a 1099-DIV is used by a financial institution for dividend payments.

    The following link is to page from the IRS website, which lists the various types of payments and the forms used for those payments.

    A Guide to Information Returns
    Wildsporty's Avatar
    Wildsporty Posts: 445, Reputation: 38
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    #3

    Oct 6, 2010, 06:23 AM

    You have to determine if the worker is an employee or an independent contractor.

    An Independent contractor is reported on a 1099 and pays all their own taxes.

    An employee is reported on a W-2 and taxes are withheld from their wages.

    An employee cannot be changed to an independent contractor and reported on a 1099.

    There are specific rules for determining if a worker is an employee or an independent contractor.

    Those rules and differences are discussed at the following section of the IRS website at IRS.gov

    Independent Contractor (Self-Employed) or Employee?

    There are penalties for misclassifying a worker.

    Shirley
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