This year, I received lots of forms for my tax filing. While most of us receive a W-2 from our main employer, any other income is usually reported with a variation of form 1099. Just like the W-2, a 1099 form is an integral part of your tax filing and ignoring them can lead to fines and trouble with the IRS. Here's what you need to know about the standard form for extra income outside of your main job.
Variations of the 1099
Not all 1099 forms are created equal. Depending on the source of the income, you may receive a 1099-MISC or a 1099-DIV. Maybe a 1099-INT or a 1099-R. There are many versions of this form for different purposes. Below is a list of the most common 1099 forms and what they are used for. Here is a list of the types of 1099 forms you may stumble upon in your tax preparations:
- 1099-A: acquisition or Abandonment of Secured Property
- 1099-B: Proceeds from Broker and Barter Exchange Transactions
- 1099-C: Cancellation of Debt
- 1099-CAP: Changes in Corporate Control and Capital Structure
- 1099-DIV: Dividends and Distributions
- 1099-G: Government Payments
- 1099-H: Health Insurance Advance Payments
- 1099-INT: Interest Income
- 1099-K: Merchant Card and Third Party Network Payments
- 1099-LTC: Long Term Care Benefits
- 1099-MISC: Miscellaneous Income
- 1099-OID: Original Issue Discount
- 1099-PATR: Taxable Distributions Received From Cooperatives
- 1099-Q: Payment from Qualified Education Programs
- 1099-R: Distributions from Pensions, Annuities, Retirement Plans, IRAs, or Insurance Contracts
- 1099-S: Proceeds from Real Estate Transactions
- 1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
- 1042-S: Foreign Person's U.S. Source Income
- SSA-1099: Social Security Benefit Statement
- SSA-1042S: Social Security Benefit Statement to Nonresident Aliens
- RRB-1099: Payments by the Railroad Retirement Board
- RRB-1099R: Pension and Annuity Income by the Railroad Retirement Board
- RRB-1042S: Payments by the Railroad Retirement Board to Nonresident Aliens
The first 1099 I ever received in my life was the 1099-INT, for interest received. Most banks send you an 1099-INT if you earn more than $10 in interest during the calendar year from bank interest, though some banks send them regardless of the interest earned.
Interest earned and reported via a 1099-INT is taxed at your regular income tax rate and is treated as regular income.
Stock investors are generally familiar with the 1099-DIV, as it is used to report dividend earnings from stock investments. If you own any dividend paying stock, your investment company will prepare a 1099-DIV form for you.
The 1099-DIV has different boxes used for different types of dividends, which do have an impact to your tax filings and tax rates. The most common boxes most investors will deal with are related to capital gains and cash dividends paid.
The 1099-MISC is a catch-all form used for income that doesn't fit into the other 1099 forms. All income has to be reported to the IRS, even if you don't receive a 1099 or other form. The 1099-MISC is used for freelance income, landlord rental income, royalties, some insurance proceeds, and “other income.”
As a blogger and freelancer, I have received 1099 forms for royalties, freelance writing, and affiliate revenues. These forms are most commonly issued to self-employed people or anyone with a sole proprietor business earning more than $600 per year from specific vendors.
Your 1099-R form will be sent by the investment company holding your retirement accounts when you take distributions. Depending on the type of retirement account you have, such as an IRA vs. a Roth IRA, your taxable income from a 1099-R will vary.
I know what you're thinking, 1099-Consolidated isn't on that list I just read, WTF is a 1099-Consolidated?
A consolidated 1099 form is often provided by investment companies who would have to send you a stack of 1099 forms for your various investments. I received a 1099 consolidated form, which included interest, dividend, and capital gains information, from both my brokerage and Betterment for the most recent tax year.
Have you received any confusing 1099 forms or do you have general questions about them? Let me know in the comments and I'll be sure to answer. If you received a 1099 that I didn't write about here, I would love to hear how you got it!
First published February 6, 2009. Updated and refreshed March, 2014.