Nine Things You Should Know

About IRS Form 1099

Works Cited: Wood, Robert W. “Ten Things You Should Know About IRS Form 1099 Before You File Your Taxes.” Forbes. Forbes.com, LLC, 31 March 2015. Web. 6 May 2015. <http://www.forbes.com/sites/robertwood/2015/03/31/ten-things-you-should-know-about-irs-form-1099/>.

There are many varieties

1099’ are tax forms that report information about certain types of income. There are many different categories of Form 1099: 1099-C for cancelled debt, 1099-G for local and state unemployment benefits, 1099-INT for interest income, etc. 1099-Misc for miscellaneous income is one of the more commonly used forms.

It’s Better to give then receive

Businesses typically must issue 1099s to payees who receive $600 or more during the year. However, there are many exceptions. For this reason, you will likely receive a 1099 for each bank account that you have, no matter how low your interest income.

Timing is Important

Businesses are required to issue their Forms 1099 by Jan. 31 for the prior calendar year. While there are fines for filing late, it’s not uncommon for payees to receive 1099s as late as May.

Remember, you still have to report the income even if you don’t receive the 1099 on time.

 The IRS also get them

Any Form 1099 sent to you also goes to the IRS. The deadline for sending 1099s to payees is Jan 31, but the payer has until the end of February to send all its 1099s to the IRS.

Update changed

addresses

After a move, be sure to update your address directly with payers and to put in a forwarding order with the U.S. Post Office. Regardless of whether you receive the 1099, the income is reported to your SSN and is noted by the IRS.

Immediately

Report errors

The time delay between the deadline to issue 1099s to payees and the deadline to submit 1099s to the IRS, means you might have a chance to correct errors. So, if you notice an error immediately tell the payer. There may be time for the payer to correct it before submitting it to the IRS. If the payer already sent the incorrect form, ask him to send in a corrected form.

 IRS Notices If you forget to report the 1099, the IRS will send you a computer-generated letter that bills you for the taxes due on the unreported income. If it is correct, pay the bill.

Report All 1099s

Every 1099 has the payer’s employer ID number and the payee’s SSN. The IRS cross checks 1099 with the payee’s tax return. If you receive a Form 1099, you can’t just ignore it, because the IRS won’t.

Remember State Taxes The majority of

states have an income tax, and they will receive the same info as the IRS. If you fail to show a 1099 on your federal return, your state will likely bill you too.

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