A 1099 form is a tax form used by the IRS to record specific types of income, including freelance income and income not received from employers. Most traditional employees receive W-2 forms from their employers recording the amount of income they have received for a year. This is done to help facilitate easy and reliable tax filings. The 1099 form covers taxable income that does not come from a full-time employer and must be tracked in a different way.
Most 1099 forms are issued to freelance workers, consultants who are self-employed. The 1099 form records exactly how much money a freelancer made that year, completely separate from federal or state taxes owed or paid in, and also separate from Social Security or medical deductions. A freelancer uses the 1099 to figure out federal and state taxes owed when filing for taxes at the end of the year.
Freelancers are usually paid per job instead of employed as salaried employees. Freelancers may have several clients; as a result, the freelancer may receive several 1099 forms at the end of the year, one from each client. This particular 1099 form is referred to as the 1099-MISC form.
Some 1099 tax forms are used to track other forms of taxable income, such as money earned from the sale of investments or money earned through Social Security benefits. Listed below are some of the 1099 forms and what they are used to track:
1099-B Money earned through sales of investments
1099-C Income reflected by canceled debts
1099-DIV Income related to dividends and capital gains distributions
1099-G Income from unemployment insurance or tax refunds
1099-INT Income made off interest
1099-MSA Medical savings account reimbursements
1099-S Money made off sale of property
1099-R Money made off retirement plans
 | While we all need to pay our taxes, you shouldn't pay more than you actually owe. Understanding a few basic income tax tips can greatly lower your tax liability. You can claim a number of tax deductions in order to lower the actual amount of tax you pay. However, you should be aware of issues such as raises and the alternative minimum tax (AMT), which may alter your income tax analysis. |
 | When tax time rolls around, people tend to fall into two categories: people who want to file their income tax return immediately and be done, and people who want to put it off as long as possible |
 | Are you worried about penalties for late tax returns? For whatever reason, you've let the April 15th income tax deadline come and go. There are penalties for late returns, but, if you follow the appropriate steps, you can minimize the penalties and keep things in good order with the IRS. |
Nearly 75 percent of Americans receive a tax return each year, with each return averaging nearly $2,500. That's a nice windfall for most of us but that doesn't mean you should run out and spend it like it's burning a hole in your pocket. |
Use our checklist as a guide to help you gather necessary forms and receipts for preparing your income tax return. |
