IRS Tax Form 1099 for 2015 – 2016

There are several forms that circulate during the tax season, one of which being form 1099-MISC, which is intended for filing by independent contractors, provided by small business owners that utilize the services of independent contractors, pay royalties, or encounter various other costs. The form is to be supplied by the small business owner to the state tax department and the IRS before the end of February for the filing year, and supplied to those that payments are paid to before the January 15 the following year after services are rendered or costs are incurred.

Form 1099 is a tax form that is used to represent all miscellaneous income that was received during the year. Typically, this income is received through a variety of sources including:

Contracted pay

Royalties

Fees, commissions, or rent

Payment towards prizes, rewards, or legal services

Golden parachute payments in excess

Medical or health care payments received

srat3

Small business owners are most impacted by the form when more than $600 is paid to a non-employee of the business or if $10 or more is paid into royalty payments during the fiscal year. In these cases, the small business owner must complete the form 1099-Misc and proceed to provide to those that received the payments and the appropriate tax agencies and departments.

The tax year follows a January-to-January cycle, with taxes completed on costs and income during the year on the following tax year. The tax season usually takes place between January 15 and April 15; however, small business owners are bound by different time restrictions. Providing the 1099 to the appropriate recipient is to be done before January 15th the year following costs paid by the small business owner. All 1099s should also be provided to the IRS before the last day of February in order to ensure accurate information within the tax department.

Only small business owners that incur these costs during the fiscal year must submit a form 1099, which will be filed with the recipient’s tax filings. If there are no contracted payments paid to independent contractors or any royalties paid during the fiscal year, there is no need for the 1099. The form is a 5 part form with designations of each part to the respectable party which is either the payer, the recipient, the IRS or the local state tax department that presides over the locality in which the income is received.

Common 1099 forms

Below is a table of various 1099 forms. Don’t be concerned if the interest statements from separate financial institutions don’t look alike. The IRS doesn’t care what format the issuer uses. It just wants the income and tax information.

srat3

Different 1099 forms

1099-B – Proceeds from broker and barter exchange transactions.

1099-C – Amount of canceled debt.

1099-DIV – Dividends and distributions.

1099-G  Certain government and qualified state tuition program payments (this includes refunds of state income taxes paid).

1099-INT – Interest income.

1099-K – Merchant card payments.

1099-LTC – Long-term care and accelerated death benefits.

1099-MISC – Miscellaneous income.

1099-OID – Original issue discount payments.

1099-Q – Payments from qualified education programs (Section 529 or 530 plans; Coverdell account distributions used to be included here, too, but now have their own Form 5498-ESA).

1099-R – Distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc. This is an exception to the nonfiling rule. You will need to send in a 1099-R with your return if the statement shows income tax was withheld.

1099-S – Proceeds from real estate transactions.

SSA-1099 – Social Security benefits statement.

RRB-1099 – Payments by the Railroad Retirement Board.

srat3