A 1099 tax form is a series of documents that the Internal Revenue Service (IRS) refers to as "information returns". It is used to report non-employment income to the IRS. The payer fills out the form with the appropriate details and sends copies to the recipient and the IRS, reporting payments made during the tax year. There are many types of 1099 forms that report various types of payments, including independent contractor income, gambling winnings, rents or royalties, gains and losses in brokerage accounts, dividend and interest payments, and more. Some common types of 1099 forms include:
- 1099-MISC: Used to report miscellaneous income, such as payments made by a business to a non-corporate US resident.
- 1099-NEC: Used to report nonemployee compensation, such as payments made to independent contractors.
- 1099-INT: Sent to taxpayers if they earned more than $10 worth of interest in the tax year.
- 1099-DIV: Used to report dividends paid to investors.
If a taxpayer receives a 1099 form, they are responsible for reporting the income on their tax return, even if they dont owe taxes on that income. The IRS matches nearly every 1099 form with the payees tax return, so its important to report all income accurately.
