If you have earned remuneration from an individual or an enterprise, apart from the wages paid by your employer, then you need to get a 1099 form. It is used to record earnings from various sources such as rent, insurance claims, tax refunds, and dividends, etc.
These are used to complete the payees’ tax returns. Since form 1099 is used to report the information of all of your income on your tax return, there are many different varieties of them.
In this blog, we will talk all about Form 1099, the different forms that come under it and the requirements of each.
Why Do You Need Form 1099?
Are you wondering whether you will receive a Form 1099 or not?
Are you wondering how to report the tips that you have earned through the year?
Wondering what all goes in a Form 1099?
This section will tell you all about Form 1099, which is an information return to report all your income and earnings. Just as income can be earned from various sources, the reporting for them also needs to be done in different ways.
Therefore, income earned from entities and individuals apart from your employer is recorded in Form 1099. There are 20 different variants of it.
The form is used to report income and proceeds etc. only for a calendar year (January 1- December 31). This is regardless of the financial year being followed by the payee for Federal Taxes.
Variants of Form 1099:
As discussed before, there are 20 different variants of Form 1099. These are on the basis of where the income was earned from. In this section we will outline them all, there usage, who issues them, the minimum amount for which they are issued and their due dates.
Form 1099-A
Purpose: The form is issued to record income from Acquisition or Abandonment of Secured Property.
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The Lender
Due Date (To recipient): January 31
Due Date (To IRS): Last day of February
Form 1099-B
Purpose: This form is issued to record the earnings from broker and barter exchange transactions.
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The broker or the one who takes part in the barter exchange as the other party.
Due Date (To recipient): February 15
Due Date (To IRS): Last Day of February
Form 1099-C
Purpose: This form is issued when there is a cancellation of debt that results in income earned.
Minimum Amount of Issuance: $600
Who Issues It: The Lender
Due Date (To recipient): January 31
Due Date (To IRS): Last Day of February
Form 1099-CAP
Purpose: This is used for the recording of earnings from changes in corporate control and the capital structure.
Minimum Amount of Issuance: $100 Million
Who Issues It: The Corporation that changed.
Due Date (To recipient): January 31
Due Date (To IRS): Last day of February
Form 1099- DIV
Purpose: This form is used to record proceedings from dividends and distributions.
Minimum Amount of Issuance: $10; $600 for liquidations
Who Issues It: The Company that ran the investment fund.
Due Date (To recipient): January 31
Due Date (To IRS): Last day of February
Form 1099-G
Purpose: This form is needed when there are earnings from Government payments. This could be in the form of tax refunds, compensation, etc.
Minimum Amount of Issuance: $10
Due Date (to the recipient): January 31
Due Date (To IRS): Last day of February
Form-1099 H
Purpose: The purpose of this form is to record the proceedings from health insurance’s advance payments.
Minimum Amount of issuance: The sender can issue the form for any earnings.
Who Issues It: The insurance company
Due Date (to the recipient): January 31
Due Date (to IRS): Last date of February
Form 1099-INT
Purpose: This form is used to record earnings from interests.
Minimum Amount of Issuance: Earnings above $10 ($600 for some interests).
Who Issues It: The form is issued by the bank or any financial institution that paid the taxpayer the interest. It can also be the government in some cases.
Due Date (to recipients): January 31
Due Date (to IRS): Last day of February
Form 1099-K
Purpose: The form is issued to record the merchant card and third-party network payments.
Minimum Amount of Issuance: $ 20,000
Who Issues It: Banks and other similar payment processors.
Due Date (to the recipient): January 31
Due Date (To IRS): Last day of February
Form 1099-LTC
Purpose: This form records an individual receiving long-term care benefits.
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The insurance company
Due Date (to the recipient): January 31
Due Date (to IRS): Last day of February
Form 1099-MISC
Purpose: This is the most common 1099 form for small businesses. This is for reporting miscellaneous income like contractor-based, freelance, tips, etc.
Minimum Amount of Issuance: $600 for non-employee compensation
Who Issues It: The employer
Due date (to the recipient): January 31
Due date (to IRS): Last day of February
1099- OID
Purpose: In case the tax-payer gets an original issue discount, then they get this form.
Minimum Amount of Issuance: $10
Who Issues It: The issuer of the debt instrument or a broker in the same role, send the 1099-OID form.
Due date (to the recipient): January 31
Due date (to IRS): Last day of February
1099- PATR
Purpose: The purpose of the issuance of this form, is to record the taxable distributions from the cooperatives.
Minimum Amount of Issuance: $10
Who Issues It: The respective cooperative
Due Date (to the recipient): January 31
Due Date (to IRS): Last day of February
1099-Q
Purpose: The form is sent for the payment received from qualified education programs.
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The administrator of or the bank that manages the tax payer’s 529 plan or Coverdell ESA.
Due Date (to the recipient): January 31
Due Date (to IRS): Last day of February
Form 1099-R
Purpose: The form records earnings from pensions, annuities, retirement plans, etc.
Minimum Amount of Issuance: $10
Who Issues It: The custodian responsible for the proceedings
Due date (for the recipient): January 31
Due date (for IRS): Last day of February
Form 1099-S
Purpose: In case there are any real estate transactions that have led to earnings then this 1099 form is issued.
Minimum Amount of Issuance: $600
Who Issues It: The person responsible for closing the transaction. In case there is no one person/entity closing the transaction, then this happens:
Mortgage lender > Transferor’s broker > the transferee’s broker/ transferee
Due date (for the recipient): January 31
Due date (for IRS): Last day of February
Form 1099-SA
Purpose: These forms record earnings from a HAS, Archer MSA, or Medicare Advantage MSA
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The institution that administers the HAS or the MSA
Due date (for the recipient): January 31
Due date (for IRS): Last day of February
Form SSA- 1099
Purpose: The form records earnings from any social security benefit statement.
Minimum Amount of Issuance: The minimum amount of issuance of the form is none, and can be done for any earnings.
Who Issues It: The Social Security Administration (SSA) issues it.
Due date (for the recipient): January 31
RRB- 1099
Purpose: If there are earnings courtesy the Railroad Retirement Board, then you will receive this form.
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The Railroad Retirement Board
Due date (for the recipient): January 31
RRB- 1099-R
Purpose: The form is for earnings from the pension and annuity from the Railroad Retirement Board.
Minimum Amount of Issuance: The sender can issue the form for any earnings.
Who Issues It: The Railroad Retirement Board issues it.
Due Date (the recipient): January 31
1099 Form: Penalties
In case an individual fails to present correct information; or the inability to furnish the form itself can lead to a stream of penalties.
- Failure to file correct information returns by the due date results to $50 in fine. (Per information return)
- A taxpayer will need to shell out $110 if they file the information return after 30 days but before August 1.
- The fine is $270 if you fail to furnish the 1099 form after August 1.
- In case you are a defaulter, the IRS can keep a complete track of it, as every 1099 form issued as a taxpayer’st Social Security Number on it.
Conclusion:
1099 form is as essential as your W2 form. Where the latter deals with what you earned and the former deals with where you earned it from. Another point to note is that not all your earnings are taxable. Take, for example, a creditor exempts your loan. As there are no earnings you do not need to pay any taxes. Such cases and many more intricate details require the expertise of a tax accountant.
A proper tax accountant is one who understands the specific needs of your business and the various compliances that you need to abide by.
In case you are looking for a tax accountant who you can trust with your 1099 form on, then you can contact our team at Accounts Confidant. We understand that 1099 form requires not only professional know-how but also the intricacies of how to file it properly. If you plan on getting ahead with the error-free tax filing of your 1099 form, then you can give us a call on +1-866-301-2307.
