How to track 1099 income AND W2 income in Wave?

kaykay331kaykay331 Member Posts: 2

I get paid via both 1099 and W2 for one of my businesses. How do I track that income accurately in Wave to distinguish between the two so that when it comes time to pay taxes, I don't end up including my W2 income (which already has taxes taken out of it) in with my 1099 income that I still need to pay taxes on quarterly? Is there a feature that helps with this automatically, or would the only way to calculate my 1099 income be to take my total income and subtract the W2 invoices/payments by hand (which sort of defeats the purpose of using software to a degree, no?) Would I create a separate income account maybe?


  • MikegMikeg Member Posts: 752 ✭✭✭

    Although they are both "active income" from the IRS's perspective, they are reported differently. You would not mix a W-2 with income that are making on a Schedule C. Your 1040 will give you the total that you made.

  • kaykay331kaykay331 Member Posts: 2

    Thanks for the suggestion, Mike, but unfortunately, I'm looking for a way to track before I get to the end of the year and filing a 1040/etc since I have to pay quarterly taxes throughout the year. Sorry if I was unclear in my earlier post, but I am looking for a way to estimate how much I owe in real-time or even just how much I am making in each "category" in real-time. My CPA files my end of year income on separate forms, like you mentioned, but I would like to distinguish the two methods of income in Wave so that I can have a better awareness of where I'm at week-to-week or even day-to-day (obviously before deductions, etc). Thanks for your thoughts, though! Much appreciate!

  • ttdvmttdvm Member Posts: 1

    I'm no CPA, but I had this problem, too. I have a small amount of W2 income that I need to make invoices and receive payments for. I didn't want to make a whole separate Wave account for just a few transactions per year, so here's what I did:

    1. Under the Chart of Accounts section, I created an Asset account called "W2 Income."
    2. Under the Sales section, I made a product/service called "W2 service" and use that on my invoice to W2 clients.
    3. When the W2 client pays me I physically deposit the check into my PERSONAL bank account NOT my business bank account attached to my business Wave account (very important!).
    4. Then, I open the invoice, click "record a payment" and set the deposit account to the "W2 Income."
    5. Finally, in the transaction section, enter a new transaction as follows: Description: "Owner's Draw," Account: “W2 Employee Income,” Category: “Owner’s Draw” in the same amount as the invoice payment.

    On my Profit & Loss report, it shows up as "W2 service" income, which I simply disregard when doing my schedule C at the end of the year.

    I'm not sure if this is the best or only way to do it, but it works for me!

    edited April 15, 2020
Sign In or Register to comment.