What Form 8865 Contractors 2024

Hello, this is Jonathan and Dorn. I am a CPA licensed in the state of Florida. Today, I want to provide you with some income tax tips. Let's first discuss the difference between a W-2 employee and a 1099 independent subcontractor. This is an important distinction that often confuses people when they come to get their tax returns done. A W-2 employee has taxes deducted from their paycheck on a regular basis, depending on how often they are paid. On the other hand, a 1099 independent subcontractor does not have any taxes withheld from their earnings. You might think that being a subcontractor allows you to keep all your money, but that's not entirely true. Regardless of whether you are a W-2 employee or a 1099 independent subcontractor, you still need to file your tax return every year. Most people have the obligation to file their taxes annually. If you are a W-2 employee, your regular tax deductions mean that you might receive a tax refund. However, this varies depending on several factors. Conversely, if you are a 1099 independent subcontractor, and you have not paid any taxes throughout the year, you are likely to owe money when filing your tax return. It's important to save some money to cover your tax liabilities if you are an independent contractor and have not had taxes deducted from your paychecks. I want to emphasize that this is a very generalized explanation, and individual circumstances can differ. The main point to remember is that a W-2 employee has taxes withheld, while a 1099 independent subcontractor does not. In future discussions, I will cover more tax topics and provide additional income tax tips. Have a great day.