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Why do I Need a 1099 Form?

by  | Smith & Price
Posted:     Updated: Oct 16, 2018  8:29 ET
 
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First of all, if you are hired as an employee you don’t need a 1099 form, you have to complete a W-2 form. 1099 should be prepared and filed only by self-employed individuals, for example, freelancers, private attorneys, and maintenance services. In addition, you don’t have to prepare this document by yourself. A company or an individual, you work with, has to send you a 1099 form in order to report your income to the Internal Revenue Service. The due date is January 31st. so if you still haven’t received a template to complete in the middle of the winter, it’s advisable to remind your hirer about his or her obligations. You may not receive respective documents in case you have been paid less than $600. But note, that it is still obligatory to report your income to the IRS. Anyway, it’s easy to find a printable sample on a web resource, for example, PDFfiller.

Form 1099-MISC Sample

What are the types of a 1099 form?

There is a range of different types of 1099 form depending on the type of income. Here is a list of those, which are the most frequently used.

  • 1099-MISC is used by freelancers or interns This document is also known as a report for miscellaneous income.
  • In case you have earned an amount from a bank or you have a savings account, you have to report your interests with the help of 1099-INT.
  • If you have made investments and have already earned any dividends, it is required to include this information in the 1099-DIV.
  • Unemployment benefits are also a subject to taxation, so if your government pays you compensation, you will probably get a 1099-G to complete. The situation with a state tax refund is the same.
  • 1099-R is created for retired individuals. If you got money from a retirement account, your broker has to issue you a respective template.
  • Use 1099-C in case your borrowed money from a creditor but your debt was canceled for some reasons.

It is very important to choose a template, that works for your specific circumstances. All of the examples are available online.

Updates in a 1099 form in 2019

Rules for submission 1099 form have been changed from year to year. 2019 is no an exclusion. Otherwise, you may get a huge penalty. Now it is required to submit documents with Box 7 filled and without separately after the January 31st. In addition, certain states are now requiring to submit 1099-Ks for reporting an amount that is more than $600 but is less than the $20,000. However, there are a few rules, that have to be implemented each time you file these docs.

  1. A business owner has to give 1099-MISC to any worker, who has been paid $600 or more.
  2. Payments include any rents, rewards, prizes, material costs, and other payments. Personal purposes are not included.

Note that the due date is April 15th. The recipient should get an appropriate template in early January.

Topics: Residential economy | Residential other
More by: David Smith

 

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Why do I Need a 1099 Form?

by David Smith | Smith & Price
Posted: Oct 16, 2018  8:29 ET    Updated: Oct 16, 2018  8:29 ET

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