When you earn wages, tips, or a salary, your employer will send you a W-2 form detailing your income over the past year. The Form 1099 is used by the IRS to report all other forms of income you’ve received.
1099-MISC – The 1099-MISC, arguably the most common 1099, was created to cover all sorts of miscellaneous income such as freelancer income and work as an independent contractor. If you’ve received any sort of income over $600 form any source, be looking for a 1099-MISC in the mail leading up to April.
1099-INT – For those of you who’ve earned income from interest, such as investment or savings accounts, you will be using the 1099-INT to report this income to the IRS. This form details exactly how much interest income you’ve earned.
1099-S – Another 1099 that seems to be gaining in popularity as of late is the 1099-S form, which details real estate transactions. This form is pretty straight forward, and you should receive the 1099-S from your broker explaining your income from your real estate deals.
1099-C – The 1099-C reports any of your debts that were cancelled in the past year. As an example, if your credit card company settled the debt that you owed by forgiving $3000, then you would be required to report that amount as income on your tax return.
1099-R – For those of you who have been planning for the future, the 1099-R will find it’s way into your mailbox if you have taken money out of your retirement account or pension plan. Yes, those withdrawals are likely considered income.
1099-DIV – One of the last more “common” 1099 Forms is the 1099-DIV, which will be important to you if you have earned income based on dividends and distributions from your stock portfolio.
A Wise Approach
The overall purpose of the 1099 is to make sure that you, your source of income, and the IRS are all in agreement about your earnings. For a complete, comprehensive, and expert look at all 20+ 1099s, you can talk to a Turbo Tax professional about which forms you should be expecting.
Remember that all your sources of income will not arrive on one 1099 form.