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All About Submitting Form 1099

September 2, 2022

The IRS requires that taxpayers report certain types of income in Form 1099. Some of the income that is reported in the form include tax dividends, state tax refunds, IRS distributions, and credit card and debit card debt forgiveness.

In this blog post, we will covertdue dates and other important information regarding Form 1099. You should consider outsourced accounting services for efficient bookkeeping services. This will prove invaluable in collecting data to be entered into the tax returns during the year.

What is Form 1099?

Form 1099 includes information about all income that you earn other than your salary and bonuses. You should visit the IRS website to learn about the due date for submitting the tax form. Generally, the due date for filing the form is February and March.  

A lot of people get confused by Form 1099 and 1040.

Form 1099 is submitted by self-employed individuals. The form is submitted only if you are an independent contractor, contract-to-hire, or private consultant. You receive the form from clients who have paid you more than $600 for your services during a year.

Income that is disclosed in Form 1099 includes the following.

  • Dividend income
  • Sale of cars, houses, or other personal assets
  • Income from IRS
  • State tax receipts
  • Loan forgiveness
  • Interest income

In contrast, form 1040 is submitted by both salaried employees and independent contractors. It includes all the income apart from the income mentioned above.

Form 1099 should be submitted even if you haven’t received this form from the client or didn’t earn $600 during a tax year. However, you are not required to send Form 1099 when you are e-filing. Contact the IRS to know more about the submission of this tax form.

Different Types of Form 1099

A lot of confusion is caused due to different types of Form 1099. Here we will briefly explain the different types of this form that you need to submit to the IRS.

Note: The due date for submitting most of the Form 1099 is 28th February each year. But you must contact the IRS to know the exact due date during the year.

1099-A

The tax form is submitted to declare the sale of a secured property. You have to submit this tax form if you are an independent contractor with income from the sale of the secured property value above $10,000.

1099-B

The tax form is submitted to declare income from a barter exchange transaction or a broker. You have to submit this tax form if you are an independent contractor with any income amount.

1099-C

The tax form is submitted to declare the cancellation of any type of debt. You have to submit this tax form if the financial company forgives more than a $600 loan during a year.

1099-CAP

The tax form is submitted to declare any changes in the capital structure. You have to submit this tax form if the changes in the capital of a registered corporation are over $100 million. The due date for submitting this form to the IRS is 28th February each year.

1099-DIV

The tax form is submitted to declare income from dividends. You have to submit this tax form if you receive a dividend income over $10. Also, you must submit this form if you have received over $600 due to the liquidation of a company.

1099-G

The tax form is submitted to declare income from certain federal bodies. You have to submit this tax form if you receive income over $10.

1099-H

The tax form is submitted to declare income from the health coverage tax credit (HCTC). This income is declared if you received HTCTC advance payments. You have to submit the form if you receive an advance payment of any amount.

1099-INT

The tax form is submitted to declare interest income. You have to submit this tax form if you receive interest income over $10. The income threshold for certain business-related interests is $600.

1099-K

The tax form is submitted to declare income from merchant cards and third-party network payments. You have to submit this tax form if you receive income over $600.

1099-LTC

The tax form is submitted to declare income from long-term care and accelerated death benefits. You have to submit this tax form if you receive benefits of any amount.  

1099-MISC

The tax form is submitted to declare miscellaneous income. The minimum income threshold for royalties and other sources is $10.

1099-NEC

The tax form is submitted to declare non-employee compensation. You have to submit this tax form if you receive non-employee compensation of $600 or more.

If you are a small business owner, you will most likely submit Form 1099-NEC.

1099-OID

The term OID in Form 1099-OID stands for Original Issue Discount. The tax form is submitted by the payer who received the discount of more than $10 on the original issue of a financial instrument.

1099-PATR

The tax form is submitted to declare a taxable distribution from cooperatives. You have to submit this tax form if you receive $10 or more from cooperatives.

1099-Q

The tax form is submitted to declare taxable payments from qualified education programs. You have to submit this tax form if you are a trustee or beneficiary who has received payments of any amount from qualified education programs.

1099-R

The tax form is submitted to declare income from the following sources.

  • Annuities
  • Pensions
  • Retirement or Profit-Sharing Plans
  • IRAs
  • Insurance Contracts

You have to submit this tax form if you receive $10 or more from cooperatives.

1099-S

The tax form is submitted to declare taxable real estate income. You have to submit this tax form if you receive proceeds of $600 or more from real estate transactions.

1099-SA

The tax form is submitted to declare income from the following sources.

  • Medicare Advantage MSA
  • Archer MSA
  • HSA

 You have to submit this tax form if you receive any amount as a beneficiary of the program.

RRB-1099

The tax form is submitted to declare railroad retirement income. You have to submit this tax form if you receive any amount from the Railroad Retirement Board (RRB).

SSA- 1099

The tax form is submitted to declare social security benefits. You have to submit this tax form if you receive any amount from the Social Security Administration (SSA).

Conclusion

One of the benefits of being a self-employed contractor is that the IRS provides more leniency regarding business expenses. But there is no leniency when it comes to income earned from sources other than the main source of income.

Form 1099 must be submitted before the specified due date to avoid incurring a penalty. And timely submission of tax documents requires proper bookkeeping and accounting of income and expenses.

Outsourcing bookkeeping tasks will save time in keeping tabs on your financial transactions. Let Maxim Liberty help you with accurate and up-to-date bookkeeping entries. You can contact us today by dialing (703) 957-6938.

Maxim Liberty is a leading bookkeeping company with over 10 years of experience helping small businesses manage their finances. Passionate about making bookkeeping simple and stress-free, we share practical tips and insights.