Contractors Corner: How To Properly File Taxes As A 1099

What’s an IRS Form 1099-MISC, why did I receive one or more, and what do I need to do with it? Most Americans are more familiar with the term Form W-2, which is generated by an employer to report your annual earnings. However, if you’re an independent contractor, freelancer, or otherwise self-employed, the 1099 is used instead to report earnings.

When Will My Form 1099 Arrive? 

After the start of the new year, you should expect to receive a Form 1099-MISC from any client that paid you at least $600 during the tax year. Your 1099s should arrive by mail by Jan. 31. If that day falls on a weekend, the deadline shifts to the next business day.

As the forms are generated by your clients, as long as your address is up to date, you need do nothing to get them. In any case, the information will be sent to the IRS via your Social Security number.

What if a Form 1099 Does Not Arrive?

If you do not receive a Form 1099 from one or more clients as expected, you have three options. The IRS suggests that if you don’t receive one by early February, you should ask the issuer for it. By mid-February, you can contact the IRS at (800) 829-1040 for help in getting this information. Alternatively, you can wait so as to avoid generating duplicate reporting.

It is acceptable to review your own banking records or pay stubs to determine the amount that should be reported.

If no Form 1099 or duplicate appears, you should still report the income to the IRS without the form, as it does not need to be attached to your tax return. Again, as long as you have the correct information, you can include it without having the statement. Your risk is in failing to report rather than reporting without the 1099 paperwork.

Other Types of 1099 Forms

In addition to Form 1099-MISC for reporting income, there are 16 additional types of IRS forms also called 1099. In general, IRS Forms 1099 inform you that you received a consulting fee, earned interest, or received another form of income. These include forms 1099-DIV for dividends, 1099-INT for interest, 1099-R for pensions and more.

The same advice holds for any other types of 1099s that may be missing. Other handy sources that can provide the information you require to file include your statements from investment, dividend, pension and bank accounts.

Careful Reporting of Form 1099

Remember, the IRS receives 1099 forms from your employers and clients, so report your figures correctly. Don’t neglect a discrepancy that will trigger an audit. Check your 1099s to ensure they match your records, otherwise contact that client to correct a mismatch, as a discrepancy is likely to raise a red flag. If a 1099 arrives after you’ve filed, check to see that it agrees with your tax return. If it does not, contact the IRS.

Paying careful attention to each of your Form 1099s as they arrive in your mailbox in January for filing before April 15 can save time, hassle and a potential audit.

 

Resolve your tax problems by visiting Rush Tax Resolution.

For more tips and inspiration for small business owners,
visit CBS Small Business Pulse Los Angeles.

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