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Benefits of 1099 Tax Forms
Through the process of running the business, there exists various measures that the business entity puts in place to ensure it has the maximum profits. The various methods of hiring employees as well as coming up with various projects that are profitable to the business are some of these measures. Normally, there are various types of employees in any business entity. Such include the independent contractors and the non-independent or long term employees. These two types of workers in the business entity have different cases and also their payment methods are very different. This is because the independent contractors are catered for by the 1099 forms and the long term employees are catered for by the W-2 forms.
There are huge differences that do exist between the 1099s and the W-2 forms. The W-2 forms only tend to cater for the needs of only the employees while the 1099s cater for the contractors as well as the subcontractors that tend to be independent. The employees do control the method unlike the independent contractors and the subcontractors who do not control the method. The purpose of the 1099 tax forms is that of the non-employment income. More to this, the individuals who receive the W-2 forms are on the employee payroll unlike the 1099s who are not on the employee payroll.
The 1099s are associated with a lot of merits. The fact that the contractors do receive a lot of money since the 1099s do not withhold the taxes which is a merit. The meaning of these is that the contractors are able to receive the full amount of tax income. In order to get more money than the employees, the contractors prefer to use the 1990s compared to the W-2 forms which do withhold taxes. There is choosing to have the option of deferring income by the independent contractors that do come up with the small scale businesses that deal with the retirement plans.
The clients find this as the simplest and easiest way of filing their forms which is the other merit of the 1099s. These clients are the subcontractors or rather the employees who are employed only for a short period of time and who are not permanent. The clients, while paying their contractors with the 1099s does not have to withhold taxes. The clients do not also withhold or even pay the social security as well as the unemployment income. There is also no need for the clients to provide training to the subcontractors which eases their work.

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