Form 1099 and W-2 are used for reporting income paid to individuals and entities. While Form W-2 is used by employers to report wage, salary, and other compensation paid to employees, Form 1099 has a wider range of use. Both forms are filed to persons who received some sort of income so they can use it to file their tax returns.
The W-2 has one and only use—to report income paid to employees. On the other hand, Form 1099 has a total of 16 that is used to report income. However, not all of them are used commonly. The most notable Forms 1099 are the MISC, INT, DIV, G, and R. These report—in order, miscellaneous income, interest payments, dividends/other distributions, government payments, and retirement income.
The bottom line is both forms report various types of income but W-2 is only issued to workers. Another thing both forms have in common is the deadline to file is the same as January 31st. But in general, since Forms 1099 are mostly issued by institutions, you shouldn’t really have an issue with receiving one in time.
Employers and Employees
As an employee, if your employer is late filing Form W-2, you can opt to file a Form 4852, the substitute form. On the other hand, if you’re the employer, there will be a minimum penalty of $50 for every W-2 you’re filing late. As the number of days increases where you did not file the wage and tax statement form, the monetary penalty amount will increase.
The same goes for 1099. Especially with Form 1099-MISC. All business owners are required to file a Form 1099-MISC if the amounts paid to a contractor during the course of the tax year. The late fees and penalties are the same as the W-2. For every 30 days that these forms are due the penalty amount will increase slightly per every form that isn’t filed.