Can a Freelancer Receive a W-2?

There are a lot of misconceptions about what it means to be a freelancer. Some people believe that freelancers are independent contractors. Whereas, others think that freelancers are self-employed. The truth is that there is no one-size-fits-all answer to this question.

Can a Freelancer Receive a W-2

Who Can Receive a W-2? 

Whether or not a freelancer can receive a W-2 depends on their specific situation.

Generally speaking, freelancers are independent contractors if they:

  • Do not need to work a certain number of hours each week
  • Do not attend staff meetings or follow the company's policies and procedures
  • Can work for multiple companies simultaneously
  • Are paid per project or task

The IRS website states that independent contractors are "responsible for paying their own taxes, as opposed to employees who have taxes withheld from their paychecks." The IRS designation means that many freelancers need to submit quarterly tax payments. They also need to pay a portion of the state and federal unemployment tax out of their own pockets.

Freelancer vs. Employee

If you are a freelancer who meets all of the above criteria, you are an independent contractor. Thus, will not receive a W-2 form from your employer. However, if you are a freelancer who does not meet all of the criteria, you may be an employee. Therefore you may receive a W-2 from your employer.

If you have a set number of specific work hours each week, you could be an employee because employers often hire employees to meet specific scheduling needs. In this case, the company would likely withhold state and federal income taxes from your paychecks as well as FICA tax payments.

The IRS defines employees as those "who perform services in the course of an employer's business and are under its control during the performance of such services."

Freelancer Agreements

Before starting any freelancing jobs, you should create a written contract agreement with your client. Any legitimate client will honor this agreement.

It can be as simple as stating that you are working off-site as an independent contractor. Confirm that the client will not require you to attend staff meetings or follow company policies and procedures. This can help avoid misunderstandings about your employment status and what they expect of you.

As a freelancer, it is crucial to be aware of your employment status. If you are considered an employee, your employer will likely issue you a W-2 form at the end of the year.

This document will outline how much money you earned during the year. It also shows how much was withheld in taxes. It is your responsibility to file this form with the IRS.

If you are a self-employed freelancer, you must file quarterly tax forms and pay the appropriate taxes yourself. You may also be responsible for paying a portion of the state and federal unemployment tax.

As a freelancer, you need to fill out a W-9 form with each client you work for. The W-9 form will confirm your name and address as well as your tax identification number (TIN).

You must give this same information to any clients who pay you $600 or more per year. If you do not provide this information, the IRS can fine you and your client up to $3,000.

You should feel more confident when accepting freelance jobs now that you know the difference between a freelancer and an employee. If you plan on starting your own business in the future, it may be easier to do so as a freelancer than as an employee.

You also need to be aware of the tax implications of being a self-employed freelancer. By understanding your employment status, you can ensure that you are meeting all of your tax obligations.

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