Sunday, February 06, 2011

What is a 1099 and Do You Need One

A 1099 also known as an information return is a tax document businesses are required to file to report certain business transactions to the IRS. The form is required by the IRS and other government regulations for businesses to file.

If you never received a 1099 form, don’t be alarmed. At some point in your life you will receive one. However, if you were told you were going to receive a 1099 wait until you receive the 1099 before filing your federal and state taxes. If you did not receive the 1099 by January 31st of the current year, contact the company and ask to be sent a duplicate copy.

If you receive a 1099 you are required to file it along with your income to the IRS because a copy has already been sent to the IRS in your name from the specified company.

There are over a dozen 1099 forms that you may receive during tax time. The most common 1099 forms are:

A. 1099-R – sent to tax filers for: annuities, charitable gift annuities, direct rollovers, excess deferrals/contributions, IRA distributions, military retirement, Roth IRA distributions, SEP distributions, SIMPLE distributions

B. 1099- sent to tax filers for: distributions

C. 1099-MISC – sent to tax filers for: non-employee bonuses/commissions, health care services, non-employee nonqualified deferred compensation, royalties

D. 1099-C – sent to tax filers who had debt canceled - charged off, written-off or settled

E. 1099-DIV – sent to tax filers for: capital gain distributions, dividends

F. 1099-Q – sent to tax filers for: Coverdell ESA distributions, direct rollovers

G. 1099-A – sent to tax filers for: foreclosures

H. 1099-H – sent to tax filers: health insurance advance payments

I. 1099-G – sent to tax filers: state and local income tax refunds, unemployment benefits

J. 1099-INT – sent to tax filers: interest income, tax-exempt income

K. 1099-LTC – sent to tax filers: life insurance contract distributions

L. 1099-Q – sent to tax filers: qualified tuition program payments

M. 1099-S – sent to tax filers: real estate sales

For more information on the different types of 1099 forms visit the IRS website.

1 comment:

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