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IRS 1099 Tax Form Explained: Here’s Everything You Need to Know

·16 min read
mediaphotos / Getty Images
mediaphotos / Getty Images

Making a certain amount of cash from pursuing a passion or by having your own side gig means you owe taxes, according to the Internal Revenue Service, but you won’t receive a W-2 form as you would from an employer. Instead, you’ll get a 1099 form.

The IRS requires certain 1099 forms to be filed when small businesses or self-employed individuals make or receive payments. You might also receive 1099 forms from certain entities, which detail amounts that are considered taxable income. If you receive a 1099 form, find out everything you need to know to correctly file your self-employment taxes.

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What Is a 1099 Form?

A 1099 tax form is a statement generated by any entity or person — excluding your employer — that details an amount of money that you were paid. Copies of the form are sent to both you and the IRS. The type of 1099 you receive can depend on the entity or person — aka the payer — sending the form.

For example, if you’re self-employed, you might receive a 1099-NEC from a client reporting payments made to you. Or you might use the 1099-NEC form to report payments you made to others as part of your business. If part of your credit card debt was canceled, you might receive a 1099-C, and if you received interest from a financial institution, you might get a 1099-INT from your bank.

Just because you receive a 1099 tax form doesn’t mean you automatically owe taxes on the income you were paid. You might be able to use deductions or other tax loopholes to eliminate or reduce your tax liability. No matter if you end up owing or not, however, it’s vital that you report the income listed on the 1099 to the IRS if required.

To find out, here’s a summary of 1099 forms and basic requirements for filing them, plus the applicable due dates so you don’t miss a deadline:

1099 Forms at a Glance

1099 Forms

Types of Income Reported

Minimum Reporting Requirement

Date Due to Recipient

Date Due to IRS

1099-A

Acquisition or abandonment of secured property (e.g., foreclosure or repossession)

All amounts

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-B

Proceeds from broker and barter exchange transactions

All amounts

Feb. 15

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-C

Cancellation of debt

$600 or more

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-CAP

Changes in corporate control and capital structure

Over $1,000

Jan. 31 (shareholders)

Jan. 5 (clearing organization)

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-DIV

Dividends and distributions

$10 or more, except $600 or more for liquidations

Jan. 31, except trustees and middlemen of widely held investment trusts — then it’s March 15

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-G

Certain government payments

$10 or more for refunds and unemployment ($10,200 unemployment compensation paid in 2020 exempt with MAGI under $150,000)

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-H

Health coverage tax credit advance payments

All amounts

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-INT

Interest income

$10 or more ($600 in some cases)

Jan. 31, except trustees and middlemen of widely held investment trusts — then it’s March 15

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-K

Payment card transactions

All amounts

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

Third-party network transactions

$20,000 or more and 200 or more transactions

1099-LS

Reportable life insurance sale

All amounts (exceptions for amounts paid to persons other than sellers)

Feb. 15 for reportable policy sale payment recipient

Jan. 15 or earlier for issuer

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-LTC

Long-term care and accelerated death benefits

All amounts

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-MISC

Miscellaneous income

Note: does not apply to payments made to corporations, with the exception of medical and healthcare payments and fees paid to attorneys

$600 or more for rents; prizes and awards (not for services); payments to a physician, physician’s corporation or other supplier of health and medical services; gross proceeds paid to attorneys; other types of payments not covered by other forms

Jan. 31 for all, except Feb. 15 if amounts are reported in box 8 or 10. Note: March 15 for trustees and middlemen of widely held investment trusts

Feb. 28 (paper filing)

March 31 (electronic filing)

Note: If any payments for non-employee compensation are reported in box 7, the due date is Jan. 31 for both paper and electronic filing

$5,000 or more of aggregated direct sales of consumer goods for resale

$10 or more in royalties or broker payments, not including dividends or tax-exempt interest

All amounts paid to fishing boat crew members; income from nonqualified deferred compensation plans

1099-NEC

Nonemployee compensation

$600 or more for payments for services performed for a trade or business by people not treated as its employees

Jan. 31

Jan. 31

$10 or more in royalties or broker payments in lieu of dividends or tax-exempt interest.

$5,000 or more of aggregated direct sales of consumer goods for resale

1099-OID

Original issue discount

$10 or more

All amounts withheld and not refunded from federal income tax under the backup withholding rules

Jan. 31, except trustees and middlemen of widely held investment trusts — then it’s March 15

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-PATR

Taxable distributions received from cooperatives

$10 or more

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-Q

Payments from qualified education programs (under sections 529 and 530)

All amounts

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-QA

Distributions from ABLE accounts

All amounts

March 1

March 1

1099-R

Distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc.

$10 or more

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-S

Proceeds from real estate transactions

$600 or more

Feb. 15

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-SA

Distributions from an HSA, Archer MSA or Medicare Advantage MSA

All amounts

Jan. 31

Feb. 28 (paper filing)

March 31 (electronic filing)

1099-SB

Seller’s investment in life insurance contract

All amounts

Feb. 15 (except as provided in Regulations section 1.6050Y-3(d))

March 1 (paper filing, except as provided in Regulations section 1.6050Y-3(c))

March 31 (electronic filing)

RRB-1099

Railroad retirement benefits

All amounts

Jan. 31

Filed by the U.S. Railroad Retirement Board directly with the IRS

SSA-1099

Social Security benefits

All amounts

Jan. 31

Filed by the Social Security Administration directly with the IRS

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What Is a 1099-A Form?

Form 1099-A, Acquisition or Abandonment of Secured Property, is filed by lenders when a debt is fully or partially satisfied because of foreclosure, repossession or abandonment of the property by the debtor — also known as the person who owes money. Even if you are not in the business of lending money, this form might need to be filed with the IRS with a copy mailed to the debtor or debtors.

When you are the debtor and receive a 1099-A, you should use the information on the form to determine whether the disposition of the property resulted in a gain or loss to you and report that information on your Form 1040, Schedule D.

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What Is a 1099-B Form?

Although Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, is filed most commonly by stock brokers. Brokers and those engaging in barter exchanges must file this 1099 form and provide a copy to the person represented in the transaction. When you receive a 1099-B from your broker, you use the information to determine the gain or loss on your stock transaction and report it on your tax return.

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What Is a 1099-C Form?

The IRS instructions specifically identify the entities — including banks, credit unions and credit card companies — that must file Form 1099-C, Cancellation of Debt, when a debt of $600 or more is canceled or forgiven. For example, if you settle a $2,000 debt with your creditor for $1,300, your creditor will send you a 1099-C form.

When you receive a 1099-C, locate the amount of the debt that was forgiven and report that information on your tax return. Unfortunately, canceled debt can result in taxable income.

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What Is a 1099-CAP Form?

Form 1099-CAP, Changes in Corporate Control and Capital Structure, applies to shareholders of a privately held corporation that underwent a change in control or a significant change in its capital structure. When you are a shareholder of such a corporation and receive cash, stock or other property, the corporation should file a 1099-CAP with the IRS and provide you with a copy.

What Is a 1099-DIV Form?

Form 1099-DIV, Dividends and Distributions, must be filed by banks and financial institutions when they pay dividends or other distributions of $10 or more. You can expect to receive a copy of the form for these types of distributions. The IRS provides detailed instructions on how to report this information on Schedule D of Form 1040. Dividends reported in box 1b are entered on line 3a of Form 1040.

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What Is a 1099-G Form?

All government agencies — federal, state and local — file Form 1099-G, Certain Government Payments, if they received payments on a Commodity Credit Corporation loan. Additionally, the agencies must file when payments are made for:

  • Unemployment compensation

  • State or local income tax refunds, credits or offsets

  • Taxable grants

  • Agricultural payments

The taxpayer receiving the payment also receives a copy of the form. For questions or disputes about the information on the form, contact the agency that filed the form with the IRS.

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What Is a 1099-H Form?

Form 1099-H, Health Coverage Tax Credit Advance Payments, is filed by providers of qualified health insurance coverage to eligible recipients when the provider receives an advance payment from the Department of the Treasury under the health coverage tax credit. You’ll receive a copy of the filed 1099-H if you qualify to receive advance payments, paid directly to your provider, to help pay for insurance premiums. The information on a 1099-H is used to determine any health coverage tax credit you qualify for when you file your Form 1040.

What Is a 1099-INT Form?

When you earn interest of $10 or more on your checking and savings accounts, your bank will file Form 1099-INT, Interest Income, and send a copy to you. The amount of interest stated on the form is reportable on your tax return. Your financial institution is also required to file this form if it withheld or paid any foreign tax on your interest, or withheld federal income tax from your interest under the backup withholding rules.

What Is a 1099-K Form?

When you use a third-party network transaction as part of your business, such as PayPal, you will receive a copy of Form 1099-K, Payment Card and Third Party Network Transactions, when it’s filed by the third party. A 1099-K must be filed when your transactions exceed $20,000 or 200 transactions in number. The information on the 1099-K is used to complete your tax return schedules for your business, such as gross receipts or sales, and expenses.

What Is a 1099-LS Form?

You’ll receive a 1099-LS form if you acquired a life insurance contract (policy) or interest in a life insurance contract in a reportable policy sale. The entity that acquires the life insurance contract files a form for each individual who receives a payment.

What Is a 1099-LTC Form?

Insurance companies, government agencies and viatical settlement providers must file Form 1099-LTC, Long-Term Care and Accelerated Death Benefits, whenever benefits are paid under long-term care contracts or death benefits. You will receive a copy of this form for these benefits if you are the insured or the policyholder. However, this does not necessarily mean that the benefits are taxable income: The payment is not taxable to you if you are the insured. For policyholders who receive per diem benefits, certain limitations apply that might result in a portion of the benefits being taxable.

What Is a 1099-MISC Form?

For anyone running a business, this used to be the most common 1099 form you would receive or file. However, the 1099-MISC has been replaced with the 1099-NEC for independent contractors. Form 1099-MISC, Miscellaneous Income, is still used for at least $10 in royalties or at least $600 in rent, prizes and awards, medical and healthcare payments, fishing boat income or payments to an attorney. This form is also used to report $5,000 or more in direct sales of consumer products for resale anywhere other than via a permanent retail store.

How Do You File a 1099-MISC Tax Form?

You must use the official printed version provided by the IRS, which you can order via the IRS website. Do not use the 1099-MISC that you can download from the IRS website because it is not scannable, and the IRS might penalize you for doing so.

Although anyone can file 1099-MISC forms electronically with IRS e-filing, all businesses that file 250 or more 1099-MISC forms in one year must use the IRS e-filing system.

What Is a 1099-NEC Form?

Form 1099-NEC replaces 1099-MISC as the form used to report independent contractor income. If you paid an independent contract $600 or more, you’ll need to file one. And if you earned $600 or more as an independent contractor, you’ll receive one from your client.

When you receive a 1099-NEC for services you performed or materials you provided to a customer, you must report this income on your tax return. Typically, you will use Schedule C and attach it to your Form 1040.

Don’t wait to make your quarterly estimated tax payment until you receive your 1099-NEC. You must pay quarterly estimated taxes when the income you receive exceeds $1,000, and the deadlines for estimated tax payments are dependent on when you receive a 1099-NEC.

What Is a 1099-OID Form?

An original issue discount applies to bonds or notes that are issued at less than face value, and the discounted amount is considered interest income. Form 1099-OID, Original Issue Discount, is used by stock brokers to report this interest. When you receive this 1099 form from your broker, you should use the information to calculate the taxable OID for your tax return.

What Is a 1099-PATR Form?

You might receive this 1099 form when you receive dividends from a cooperative. Form 1099-PATR, Taxable Distributions Received From Cooperatives, must be filed by cooperatives that paid their members more than a $10 dividend or withheld any federal withholding tax. For-profit cooperative corporations receive special tax treatment by the IRS, and a patronage dividend can be used to reduce taxes.

What Is a 1099-Q Form?

You will receive a 1099-Q if someone contributed money to a qualified education program — under sections 529 and 530 — and named you as beneficiary. The organization or person who manages the program will file the 1099-Q and give you a copy. No tax is due on the distributions you receive if you are in school and use the program money solely for school expenses.

What Is a 1099-QA Form?

You’ll receive a 1099-QA form if you receive a distribution from an ABLE account. ABLE accounts are savings accounts for disabled individuals and their families. Account balances grow tax-free. States and agencies that distribute ABLE account funds file a 1099-QA to report the distribution, and they provide a copy to the individual who received the distribution.

What Is a 1099-R Form?

When you take a distribution of $10 or more from your retirement plan, the custodian of the plan must file a 1099-R and provide you with a copy. When you take distributions from more than one plan, you will receive a separate 1099-R for each plan. The information on the form is used to calculate the taxable amount for your tax return.

What Is a 1099-S Form?

Form 1099-S, Proceeds From Real Estate Transactions, is used to report the sale or exchange of real estate, such as your home, rental property, co-op or any other real estate. In situations where your sale is handled by a title company or attorney, the company or attorney will usually collect the required information and report it.

In certain situations, however, the form does not have to be filed. For example, if the sale price of real estate is $250,000 or less and the property was the seller’s personal residence for two of the last five years, the transaction does not have to be reported.

What Is a 1099-SA Form?

When distributions are made from a health savings account, Archer medical savings account or Medicare Advantage medical savings account, directly to you or your medical provider, you will receive a 1099-SA from your plan’s manager. When you use the distributions from the plan for medical purposes, however, you report the distribution yourself by filing Form 8889. The distribution is considered taxable income and is reported on your tax return if the 1099-SA indicates that you did not use the distribution for medical purposes.

What Is a 1099-SB Form?

Insurance companies file a 1099-SB when they transfer a life insurance contract. You’ll receive a 1099-SB from the insurer if you acquired the contract and transferred it to another individual.

What Is an RRB-1099 Form?

When you are a beneficiary of railroad retirement benefits, each January you’ll receive an RRB-1099 from the U.S. Railroad Retirement Board. This form is filed by the RRB directly with the IRS and is used to calculate the taxable amount of the benefits received.

What Is an SSA-1099 Form?

This form is issued directly by the Social Security Administration whenever you receive any Social Security benefits. When you are required to pay income tax on any of the benefits you received, this form provides the information needed to determine the taxable amount.

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Daria Uhlig, Barri Segal and Cynthia Measom contributed to the reporting for this article.

Last updated: Sep. 20, 2021

This article originally appeared on GOBankingRates.com: IRS 1099 Tax Form Explained: Here’s Everything You Need to Know