Form 1099 is one of several IRS tax forms (see variation sections) used in the United States to prepare and file a return information to report different types of income other than wages, salaries, and tips (for which Form W-2 is used instead). The term return information is used differently than the term tax refund even though the last term is sometimes used in everyday language to describe both types of returns.
This form is used to report payments to independent contractors, rental property income, interest income and dividends, sales proceeds and other income. 1099 blank forms and related instructions can be downloaded from the IRS website.
Video Form 1099
Significance for payee tax refund
The payee uses the information provided on 1099 forms to help them complete their own tax return. In order to save paper, payers can give single-payee a 1099 Composite Form listing all 1099 of their transactions for the full year. Taxpayers are typically not required to attach Form 1099 to their own Federal income taxes except Form 1099 including a report for Federal income tax withheld by payer from related payments.
Issuing or non-issuance of Form 1099 in certain cases does not specify the required tax treatment of the payee. Each taxpayer is legally liable to report the correct total amount of income on his own Federal income tax return regardless of whether Form 1099 is filed.
For various reasons, some of the Form 1099 reports may include the amounts that are not actually taxed to the payee. A common example is Form 1099-S to report results (not profit) from real estate transactions. Form 1099-S preparer will report the proceeds of sale regardless of the amount of taxpayer's "base" in real estate being sold. (The base is usually the amount of costs incurred by the taxpayer when he acquires the property, perhaps the year before the sale.) The taxpayer's base amount is deducted by the taxpayer (on his own tax return) from the amount earned specify the profit (if any) on the sale.
In any case, taxpayer-paid payers are responsible for filing an accurate Federal tax return.
Maps Form 1099
Archiving requirements
Each payer must complete Form 1099 for each closed transaction. Four copies made: one for payer, one for payee, one for IRS, and one for the State Tax Department, if required. Obligators who file 250 or more reports of Form 1099 must file all electronically with the IRS. If less than 250 requirements are met, and paper copies are filed, the IRS also requires the payer to send a copy of Form 1096, which is a summary of the information form sent to the IRS. However, 1096 is not required if the 1099 form is submitted electronically. Refunds should be submitted to the IRS at the end of February as soon as the year in which the goods of income or other proceeds are paid. A copy of the refund should be sent to the payee, however, by the end of January.
The law provides various dollar amounts where there is no reporting requirement of Form 1099. For some variants of Form 1099, for example, no submission is required for payees receiving less than $ 600 from payers during the year. For Form 1099-MISC in particular, businesses are required to submit Form 1099 for each contractor who pays more than $ 600 for service for a year. This requirement does not normally apply to companies that receive payments. See the table in the variation section for a certain minimum amount for each form.
This form is used to report earnings, results, etc., only in the calendar year (January 1 through December 31), regardless of the fiscal year used by payers or payees for other Federal tax purposes.
Variant
By 2015, multiple versions of Form 1099 are used, depending on the nature of the revenue transaction.
One of the foremost uses of Form 1099 is to report the amount a business pays (including nonprofits) to a non-corporate US independent contractor for the service (in IRS terminology, the payment is non-employee compensation ). The uniqueness of this form also leads to the use of the phrase "1099 workers" or "economic 1099" to refer to the independent contractor itself.
In 2011 the requirement was extended by the Small Business Employment Act 2010 for payments made by persons receiving income from rental properties.
Form 1099 is also used to report interest (1099-INT), dividends (1099-DIV), sales proceeds (1099-B) and several other income types (1099-MISC). 1099 blank forms and related instructions can be downloaded from the IRS website.
The following table provides information for each variant. Note that for those who have an electronic Form 1099 filling, the due date for the IRS is March 31th rather than the last day of February.
History
In 1918, Form 1099 was made by the Internal Revenue Service for use with the 1917 tax year. At that time, employers were required to use the form to report a salary paid over $ 800.
See also
- Form 1040
- Taxation in the United States
External links
- IRS instructions to establish 1099-MISC, including guidelines for what payments should be reported
References
Source of the article : Wikipedia
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