Question 10
People sometimes mix up reporting income on a W-2 vs. a 1099. W-2 workers usually have taxes withheld by employers and receive documented wages. Contractors who receive 1099s often need to handle self-employment tax and estimated payments. A common misconception is that 1099 income isn't taxable — it is. Another mistake is failing to set aside money for taxes when you have non-withheld income. This question checks a basic, practical distinction so you can remember to set aside taxes from non-withheld pay.
Which statement is true about 1099 (nonemployee) income compared with W-2 wages?
Did You Also Know...
By Wise Wallet
Regularly checking your credit report makes it easier to spot errors or identity theft before they cause bigger problems.