You are not alone if you find yourself asking, “Can I file W2 and 1099 separately?” In short: No. Many employees on company payroll end up accumulating multiple income sources. A “side hustle,” as part of the larger gig economy, is one or more part-time jobs that adds to a person’s overall income.
Employers issue W-2 form to employees on a company’s payroll. By contrast, employers issue 1099 forms to independent contractors, freelancers, or self-employed individuals who performs a service for a company. An individual can receive and file both of these forms in a tax year.
While employers don’t need to worry about filing W2 and 1099 forms separately, many accountants will need to understand this process. This guide is designed for accountants who have clients with multiple income streams – in other words, those who will receive both W2 and 1099 forms come tax season.
Filing W-2 and 1099 Forms
So… Can I file W2 and 1099 separately? Ultimately, no. These forms should be filed together and can actually necessitate using Form 1040, not to be confused with Form 1040A or 1040EZ. Income and withholding determine refunds. As a result, the IRS needs the combined information from the W-2 and 1099.
The combined information reported on a W2 and 1099 can be used to fill out Form 1040. The first page of the 1040 will ask for your total employee taxable compensation from the W-2, which should then be added to any other taxable income for the year. The 1099 reflects the income derived from independent contracting. You will report profit earned and losses incurred on that same first page of the 1040.
The Benefits of E-Filing
E-filing is the preferred tax filing method for several reasons. Whether you are considering, “Can I file W2 and 1099 separately?” filling out a W-2 and 1099 manually increases the likelihood of mistakes. Choosing to e-file helps eliminate personal error. E-filing can prevent errors from filers and the IRS alike.
If you decide to e-file your taxes, the IRS will not have to re-enter tax data into its system. The filer will also receive notification that the IRS has received the return. Manual filers do not receive this notification. If an accountant e-files, a return will likely make its way to you much faster. Cutting out mailing time can expedite the return process.
The decision to e-file also provides you with the option to have the IRS electronically withdraw money from your bank account. Accountants and clients can make these decisions on their own time, but be wary of any tax deadlines.
E-filing saves time and effort for both the filer and the IRS. Managing multiple sources of income can be difficult enough. Make tax season more efficient by using online tax software to e-file instead of manually filing a W-2 and 1099.
AMS W-2/1099 Forms Filer Can Help
Filers who are accounting for more than one type of taxed income often wonder, “Can I file W2 and 1099 separately?” To avoid confusion, make sure to e-file. Using tax software can take away the stress of multiple filings. The AMS W-2/1099 Forms Filer accommodates the complications of modern income sources, leaving filers with a sense of relief.
Software Solutions from AMS
Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.
