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USAA is The American Legion's preferred provider of financial services. Offering a range of top-rated financial and insurance products and services. USAA welcomes honorably discharged U.S. military veterans, active-duty troops and qualified family members and descendants of those who have served. USAA contributes funds to American Legion programs when members join through a dedicated channel:
usaa.com/legion or by calling toll-free at 1-877-699-2654.

Financial Questions & Answers

Financial Questions & Answers

Question:

Can a nonprofit organization such as the Legion, have employees and only use a 1099 or do they have to be taxed? – Christy

Answer:

Yes … and yes. Any organization, non-profit or not, may have both employees as well as contractors. The IRS actually has a publication, 1779, that distinguishes independent contractors from employees. Employees typically receive a W-2 while independent contractors receive a 1099. In either case, the recipient is required to report the income and pay the appropriate income taxes. However, an independent contractor may file a Schedule C (which shows the business income and deductible expenses) or the appropriate tax form given how they have set up their particular business (i.e. corporation or partnership) while an employee would typically just use the standard Form 1040.