We regularly get questions from CRNAs about W-2 and 1099 tax forms. Who gets which and why? Can I get multiples or both? W-2 and 1099 forms are two different tax documents which are based on a CRNA’s employment classification and are used to report income and taxes to the IRS.
- W-2 FORMS
A W-2 form, also known as the Wage and Tax Statement, is issued by an employer to a CRNA employee. It is used to report the CRNA's wages, bonuses, and other compensation, as well as the taxes withheld from their paycheck.
When a CRNA receives a W-2 form, it means that they are classified as an employee of the hospital, group, or healthcare facility where they work. The employer is responsible for withholding federal income tax, state/local income tax (as applicable), Social Security tax, and Medicare tax from the CRNA's wages. These taxes are then reported on the W-2 form along with the total wages earned by the CRNA during the year.
In addition to reporting wages and taxes withheld, the W-2 form also includes other important information such as the employer's identification number (EIN), the employee's Social Security number (SSN), and details about any retirement plan contributions or other benefits provided by the employer.
- 1099 FORMS
On the other hand, a 1099 form, specifically Form 1099-MISC, is used to report income of $600 or more per calendar year received by individuals who are not employees but rather CRNA independent contractors or self-employed individuals.
CRNAs who work on a contract basis or provide services independently will typically receive a 1099 form from the entity or entities they have provided services to. (Please note - if your contract income is paid to your business as an S Corp, the paying entity is not required to issue a 1099.) As such, self-employed CRNAs are responsible for paying their own taxes, including (but not limited to) federal income tax, state/local income tax (as applicable), Social Security tax, and Medicare tax. The entity or entities that have engaged the CRNA's services will report the total amount paid to them on the 1099 form.
Unlike a W-2 form, a 1099 form does not include any taxes withheld or employer retirement contributions. It is solely used to report the income received by the CRNA as an independent contractor. It is important for CRNAs who receive a 1099 form to keep track of their income and expenses throughout the year in order to accurately report their earnings and deductions when filing their taxes.
The main difference between a W-2 and a 1099 is the employment status of the individual. If a CRNA is classified as an employee, they will receive a W-2 form, while if they are classified as an independent contractor or self-employed, they will receive a 1099 form. If you are both an employee CRNA and a CRNA independent contractor, then you will receive both a W-2 and a 1099. And yes, with multiple work arrangements, you can receive multiples of either form!
Mastering your finances doesn't have to be a daunting task. With the right knowledge and insights, you can navigate through the complexities of retirement planning, CRNA self-employment strategies, tax planning and investment management to strategically plan for your future.
With decades of experience working exclusively with CRNAs, CRNA Financial Planning® has the knowledge to help you save more of your hard-earned money and plan for life after anesthesia. Schedule an introductory phone call to discuss your current situation and needs. You can also call our office at 855.304.3748 or email us at firstname.lastname@example.org.
The opinions voiced in this material are for general information only and are not intended to provide specific financial or tax advice or recommendations for any individual.
Investment Advice offered through Private Advisor Group LLC, a Registered Investment Advisor.