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1099 or W-2?
Five minutes from now, you'll know the difference.
People welcoming you to the Intuit 1099 & W-2 Wizard
Welcome to the Intuit 1099 & W-2 Wizard. Simply answer 10 short questions about a given worker and you'll receive a classification recommendation on whether your worker is an independent contractor (1099) or an employee (W-2).
Let's Get Started
Women walking out bakery with briefcase
How often does this person work for you?
How regularly someone works for you is more important than how many hours she works for you.
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An assistant who comes in Thursdays would be considered (part time (ongoing)).
An accountant, who balances the books quarterly, falls into the (occasionally) category.
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Calendar
Do you set the person's schedule?
An indicator of employment status is how much control you exercise over a worker’s schedule.
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Select Yes if you have the ability to set when and where a worker needs to perform the job.
Select No if the worker sets his own schedule.
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People looking at flower vase
Do you instruct or supervise the worker?
While you're probably providing all workers with some guidance, how much control you have over their approach helps determine their status.
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Select Yes if you provide or could provide day-to-day training, instruction or supervision.
Select No if the worker uses her own methods, with little or no direction.
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Workers exchanging money
If additional workers are needed for a job, who hires them?
The amount of control you have over a worker's decision-making power is an important factor.
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If your property-management firm has a handyman who needs to bring in an electrician, who would hire and pay the electrician? If it’s your responsibility, it is more likely the handyman is an employee.
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Construction painter
Who pays the costs related to the work?
How much the worker pays for tools and equipment to perform the job compared to how much you pay is another factor.
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Select I provide tools if you supply most or all of the necessary equipment, supplies, infrastructure for the work (you’re making the investment).
Select Worker has invested if the person uses their own.
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Wall mounted time punch clock
How is the worker paid?
The timing and method of payment is an indicator of the worker’s status. Employees are often on payroll, whereas contractors invoice you.
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If the person is paid on a fixed schedule or by the hour, she’s more likely an employee. However, those who are only paid when a project is complete or based on agreed upon goals may be independent contractors.
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A worker driving a car
Is the worker economically dependent on your business?
An important factor in deciding whether a worker is an independent contractor or employee is whether she is dependent on you or, if she is in business for herself.
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Answer Yes if she relies on your business only.
Answer No if she runs her own business working for other customers.
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Women working in catering kitchen
Does this worker make decisions that impact their own profits and losses?
How much the worker’s managerial skills affects her opportunities for profit or loss helps determine her worker status. When risk is shared, and the worker gets paid only when you get paid risking loss of her own investments, she is more likely an independent contractor. When a worker only needs to work more hours or be more productive to increase her profits, her managerial skill does not affect her profits.
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Select Yes if she rents an office, advertises or has additional clients.
Select No if the worker has little or no risk.
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Work badges
Is this person hired to work indefinitely, or for a specific project or time period?
How long someone works for you is one of the key considerations in determining employee status.
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Someone who works indefinitely is probably an employee.
Someone who works on a specific project or for a fixed time period may be an independent contractor.
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A cashier at work
Are the person’s activities a core part of your day-to-day business?
The role a person plays in your broader business is a critical factor. If the work performed increases your profits, the person is more likely an employee.
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Select Yes if the work is in the chain of revenue,such as a cashier in a retail store or a receptionist in an office environment.
Select No if the worker is an outside specialist, like a plumber called in for emergency repairs.
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1099 independent contractor
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The worker is more likely to be classified as a 1099 independent contractor
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1099 independent contractor
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The worker is somewhat likely to be classified as a 1099 independent contractor
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The worker is somewhat likely to be classified as a W-2 employee
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W-2 employee
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The worker is more likely to be classified as a W-2 employee
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W-2 employee
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The worker is highly likely to be classified as a W-2 employee
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W-2 employee
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Somewhat likely
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1099 Contractor
 
 
 
 
W-2 Employee
We’re recommending this classification because your responses indicated:
  • You have limited ability to direct how, when, and where this person works
  • This person is not economically dependent on your business
  • The person’s service is relatively incidental to your business
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Remember, determining worker status is a tricky business. And, while the 1099 & W-2 Wizard is based on IRS and Department of Labor guidelines, we recommend you consult your tax or legal advisor.
We’re recommending this classification because your responses indicated:
  • You can or do control how, when, and where this person works
  • This person takes little or no personal financial risk
  • This person’s work is relatively important to your business
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Remember, determining worker status is a tricky business. And, while the 1099 & W-2 Wizard is based on IRS Department of Labor guidelines, we recommend you consult your tax or legal advisor.
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