What is IRS Tax Form 1099?
IRS tax Form 1099 is used to report income other than wages, tips and salaries (look to Form W-2 for those types of income).
Generally, people are familiar with the common types of the 1099. These include 1099-DIV and 1099-INT, the forms sent to account holders by their banks each year to document interest, dividends, and distributions paid to the individual over the course of the year. These individuals then report the income on their federal income tax returns, i.e. a Form 1040, 1040A, or 1040EZ.
Another example of a common 1099 variant is the 1099-MISC. This form is used to report various types of income, including non-employee income (otherwise known as contractor income), income from awards and prizes, royalties, and various other sources.
IRS Tax Form 1099-MISC
Form 1099 is what the IRS refers to as an information return. Information returns are documents that report certain miscellaneous types of income, income not included in normal. There are a vast number of Form 1099 variants to complement all manner of different types of income. Here’s a list of most:
1099-A: Acquisition or Abandonment of Secured Property
1099-B: Proceeds from Broker and Barter Exchange Transactions
1099-C: Cancellation of Debt
1099-CAP: Changes in Corporate Control and Capital Structure
1099-DIV: Dividends and Distributions
1099-G: Government Payments
1099-H: Health Insurance Advance Payments
1099-INT: Interest Income
1099-LTC: Long Term Care Benefits
1099-MISC: Miscellaneous Income
1099-OID: Original Issue Discount
1099-PATR: Taxable Distributions Received From Cooperatives
1099-Q: Payment from Qualified Education Programs
1099-R: Distributions from Pensions, Annuities, Retirement Plans, IRAs, or Insurance Contracts
1099-S: Proceeds from Real Estate Transactions
1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
1042-S: Foreign Person’s U.S. Source Income
SSA-1099: Social Security Benefit Statement
SSA-1042S: Social Security Benefit Statement to Nonresident Aliens
RRB-1099: Payments by the Railroad Retirement Board
RRB-1099R: Pension and Annuity Income by the Railroad Retirement Board
RRB-1042S: Payments by the Railroad Retirement Board to Nonresident Aliens
W-2G: Certain Gambling Winnings
This much is the same across all variants of Form 1099: payers must provide payees with copies of their 1099 forms for a tax year by January 31 of the following year. If you’re expecting a 1099 and have not received it, contact the organization as soon as possible. The sooner you have all of your 1099 forms, the sooner you can begin work on filing your taxes.
Exactly how the incomes reported on a Form 1099 are taxed can vary. Dividends and capital gains are taxed at different rates from standard income. If you’re self-employed, incomes reported on a Form 1099-MISC might be subject to the self-employment tax, the other half of Social Security and Medicare taxes usually paid by employers. When you start adding in the other variants of the 1099, your tax situation can get intricate and complicated.
If you find yourself bogged with variants of Form 1099, consider filing your taxes with a live professional or an online tax service. Their free online tax software can make your tax nightmares disappear. You might also consider using desktop tax software.
Filling out a federal income tax return using several versions of Form 1099 can drive a common taxpayer up a wall. A qualified service will ask you questions about the types of forms you have and your tax situation, and then apply the pertinent rates to your various types of income. They will also try to find ways to limit your liability, which is exactly what every taxpayer likes to hear.