What is IRS Tax Form 1099?

Form 1099 Income Tax
Photo: Alan Cleaver

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.

Any company that pays an individual $600 or more over the course of a calendar year is required to report said money to the IRS on a Form 1099-MISC. Likewise, the payee is required to report those funds as income on their federal tax return for that year.

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 like  Turbo Tax or H&R Block.  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.

Published or Updated: April 4, 2013
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

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