Employers sometimes think that there is a W2 form they use for self employed workers, but the reality is that there is no W2 self employed tax form. A review of how self-employed individuals pay taxes to the IRS might be useful for understanding how an employer handles reporting the wages that they pay to people not on their usual payroll.
As of May 2025 in the United States:
- Approximately 16.8 million Americans were self-employed
- Self-employed Americans accounted for 10.3% of the total workforce
- There were roughly 6.5 million incorporated business owners
- There were roughly 10.2 million unincorporated individuals
Employers might also find it useful to know how to file taxes for independent contractors that they pay throughout the year. Advanced Micro Solutions’ 1099-etc software can support the forms that you need and make tax filing simple regardless of your workers’ classifications.
How Self-Employed Individuals Pay Taxes
Self-employed individuals either conduct a business on their own or as an independent contractor. They are:
- Not on an employer’s payroll
- Responsible for their own training, materials, and employment taxes
When an employer hires someone who is self-employed, they become the payer and the worker is the payee. Since there is no W2 self employed form, self-employed individuals pay their own self-employment taxes to the Internal Revenue Service.
The IRS requires self-employed people to:
- File an annual tax form
- Pay self-employment taxes quarterly
Unlike employees who have their employer withhold part of their paycheck to pay for Social Security and Medicare, self-employed workers pay this tax themselves. All income and tax reporting is done with the 1040 tax form.
How Employers File Taxes for Nonemployee Workers Without a W2 Self Employed Form
Although employers do not withhold any pay from self-employed workers, an employer must file a Form 1099-NEC for non-employee compensation that is equal to or greater than $600 for that year. The IRS provides a detailed list of instructions for employers who need to file a 1099 and what those purposes might be aside from nonemployee compensation.
The steps for filing Form 1099-NEC for non-employee compensation are relatively simple. On a 1099-NEC form:
- You are the payer and the contractor is the payee
- You provide contact and tax identification for both yourself and the payee
- You report the amount you paid to the self-employed payee
- You must file the original Copy A with the IRS
- You can send a copy of Copy A to the payee and keep a copy for your records
Self-employed individuals use this information to file their employment tax and income forms.
People Also Ask
- What are the pros and cons of self-employed online tax filing? – Self-employed tax filing does lend itself to enabling quicker refunds and stronger security features. Keep in mind that there may be a learning curve and lack of support for certain programs.
- How can I avoid self-employed W-2 or 1099 tax mistakes? – Knowing the forms that you need to submit, keeping track of expenses and income, and staying on top of deductions will help prevent you from making self-employed W-2 or 1099 tax mistakes.
AMS Tax Software Supports All Employer Tax Forms
Since there is no W2 self employed form, employers need a tax software that allows them to file a variety of tax forms. Our base W-2/1099 Forms Filer program is an ideal software package for employers who need to file for different types of workers. AMS takes a modular approach to our software packages. Users can add modules onto the base package to customize the tools that you use during a tax season.
Access our free 1099-etc Demo software to try it out for yourself. Call our Sales and Information Team at (800) 536-1099 with any of your questions.