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Requirements for Properly Completed IRS 1099 Forms

Before filling your forms to the IRS, as a tax filer, you must know the basic requirements for completing the forms. So that you will minimize your errors and you are limiting re-filing. IRS 1099 form consists of varieties of forms that are used to report your income. But, in this blog, we are going to understand what are all the required information you need to collect before filing.

Before jumping into the requirements section, let us throw some light on Form 1099.

What Is a Form 1099?

Form 1099 is generally an information return. You will receive this form 1099 through your mail when you incur income from your employer or the person whom you worked for during the tax year. If you have provided your services to multiple clients and received a minimum payment of $ 600 then you can expect a form 1099. You need to report the information on your income in the 1099 tax return form.

Form 1099 Vs W-2?

Few of them are confused between Form 1099 and W2. To clear that, a W 2 reports the tips, salaries, and wages, while the form 1099 reports all other kinds of income. IRS 1099 form consists of various types and each of the forms is used to report specific and different types of income.

Form 1099 Types, Requirements, and their Due Dates:

 

The below table consists of each type of 1099 form by their number, description, requirements and the due date to receive the 1099 form. Check the table for clear understanding:

1099 Form Form Description Minimum Amount Reported* 1099 Form  Receive It by Date
1099-A Acquisition or Abandonment of Secured Property No minimum amount. Any amount 31st January
1099-B Proceeds From Broker and Barter Exchange Transactions No minimum amount. Any amount 15 th February
1099-C Cancelation of Debt $ 600 31st January
1099-CAP Changes in Corporate Control and Capital Structure $ 100 million 31st January
1099-DIV Dividends and Distributions $ 10 ($ 600 for liquidations) 31st January
1099-G Certain Government Payments $ 10 31st January
1099-H Health Coverage Tax Credit (HCTC) Advance Payments No minimum amount. Any amount 31st January
1099-INT Interest Income Required to report interest payments of $ 10 or more by the financial entities; $ 600 or more by your business or trade 31st January
1099-K Merchant Card and Third-Party Network Payments $ 20,000 31st January
1099-LTC Long-Term Care and Accelerated Death Benefits No minimum amount. Any amount 31st January
1099-MISC Miscellaneous Income Required to report miscellaneous payments of $ 600 or more; $10 or more for royalties. 31st January
1099-OID Original Issue Discount $ 10 31st January
1099-PATR Taxable Distributions Received From Cooperatives $ 10 31st January
1099-Q Payments From Qualified Education Programs No minimum amount. Any amount 31st January
1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. $ 10 31st January
1099-S Proceeds From Real Estate Transactions $ 600 31st January
1099-SA Distributions From an HSA, Archer MSA, or Medicare Advantage MSA No minimum amount. Any amount 31st January
RRB-1099 Railroad Retirement Board Statement No minimum amount. Any amount 31st January
SSA- 1099 Social Security Benefit Statement No minimum amount. Any amount 31st January

Apart from those 1099 forms, the most commonly used forms are form 1099 MISC. So let us have a detailed look into Form 1099 MISC reporting requirements.

 Form 1099 MISC Reporting Requirements:

Generally, you need to send 1099 MISC if you have done the payment to a non-employee of about $ 600 or more during the tax year. Apart from that, there are some other requirements based on the type of payment and the bond between the payer and payee. According to the IRS, Form 1099 MISC is needed if you have done the following types of payments:

  1. Attorney Fees: Payments to the attorney for the activities related to legal settlements must be reported in the Box 14. Apart from that for other legal services that are directly given to a company then the fees to the attorney comes under box 7.
  2. Awards and Prizes: This is applicable to all the general awards and contest winners that you awarded through your business. The winners also need to pay the taxes for their prizes. Box 7 is for the prizes awarded to non-employees as a reward for their services. But Box 3 is not for services performed.
  3. Healthcare and Medical payments: You need to report the payments that you have done to the doctors or providers of any medical services. For instance the payments for physical examinations, hospital charges/ fees, lab work. Here the tax-exempt hospital payments are not reportable. You can report the payments that you made to the profit hospitals.
  4. Other Payments that contribute to your income: Income that comes under this category is reported in box 3.
  5. Rents: Here, in this case, you can report the rental payments if your business rents real estate, cars or property.
  6. Royalties: Royalty payment is applicable to an author, for the right to publish or distribute the author’s work. The royalties are at least $ 10.
  7. Services received from your non-employee: These services include the fees paid to the accountants, attorneys, engineers, speakers, directors, etc; marketing services, landscaping services, installation services; repairing equipment, office machines, etc. This box is called as non-employee compensation, which is Box 7.

Do you need to Report 1099 payment even though you did not receive a 1099 Form?

IRS regards every 1099 payment as taxable income, and you are responsible to report the 1099 payment on your tax return.

For instance, if you have earned less than $ 600 by providing your service to various clients, then the client will never send you Form 1099 as the payment amount is less than $ 600 as an independent contractor. But you need to file report the income that you earned as a self-employed service

If you do not receive a Form 1099 on Time?

When you are expecting a Form 1099 from your employer and you do not receive the form by 15the February, then IRS suggests to contact them at 1 800 829 1040, where you will be able to make use of the substitute form to report your return and you can e-file them.

Hope this article gave a clear picture of the requirements for IRS 1099 Forms. For further assistance and Clarifications, you are just a call away from us to reach our customer support team at 703-229- 0326 or drop a mail at support@tax2efile.com. We are happy to assist and serve you at any time.

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