Form 1099 is a tax form issued by the Internal Revenue System for reporting certain income received during one financial year. Simply put, IRS Form 1099 is an information reporting document as it reports a taxpayer’s income information to the IRS. Form 1099 is vital as it does not come from an employer and, contrarily, encompasses the non-employee income that an American citizen earns. Moreover, businesses must issue Form 1099s to any payee (other than a corporation) who receives at least USD 600 in non-employment income during the year. Likewise, it is noteworthy to remember that the Internal Revenue System matches all 1099 forms and W-2 forms against a taxpayer’s 1040 tax forms. In case of discrepancy, they send out a CP2000 notice, which implies that the individual owes more money to the state. Now that we know its fundamentals let us learn how to get a 1099 form and its other details.
TYPES OF FORM 1099
According to the sort of revenue earned in a calendar year, there are a variety of Form 1099s. 1099 will be available in 2022 in 20 different forms. And, without further ado, look at some of the most popular variants.
1. 1099- DIV: It is typically sent to a taxpayer in case they earned any dividend income throughout one financial year. It is common for corporations to offer investors dividends in the form of cash payments for owning their stock or equity shares as a form of compensation.
2. 1099-INT: It is sent to taxpayers who had earned more than USD 10 of interest in one tax year. Typically, financial institutions like banks, investment firms, and brokerage firms render a 1099-INT.
3. 1099-G: It is sent to the American citizens who receive money from the federal, state, or local governments. For example, taxpayers who receive unemployment benefits or a local tax refund are likely to receive a 1099-G.
4. 1099-5: It is issued when a taxpayer receives a distribution from a pension, retirement plan, or an individual retirement account. There are exceptions to this rule, and if you are unsure, you should seek the advice of an accountant or tax advisor.
5. 1099-S: Taxpayers who sell or swap property during a given tax year are eligible for a real estate transaction certificate.
6. 1099-MISC: It is typically issued for income that falls outside the other 1099 forms. For example, some types of non-employment income like prize money, rewards, etc.
7. 1099-NIC: It is filed in case a business has paid a non-employee more than USD 600 during a tax year. For example, a freelance content writer, a designer, a social media manager, etc. are all examples of non-employees who might be hired to accomplish work.
HOW TO GET A 1099 FORM
If you are pondering how to get a 1099 form and when they are issued, the answer is simple: some taxpayers receive them in the mail during February, and they are also available on the IRS website. If your client has not sent you 1099, contact them or report the taxes on your own. In addition, a physical copy of IRS Form 1099 is available at the local office supply store or the accounting firm.
Comments