What is Tax Form 1099?
Form 1099 is used in the United States to prepare and file for information to report various income types other than wages and salaries.
The form is also used to report independent contractors’ payments, rental income, income from interest and dividends, sales proceeds, and other miscellaneous income.
How to file Form 1099
The payer must complete Form 1099 to cover each transaction. Four copies are made for tax form:
- One for the payer
- One for the payee
- One for the IRS department
- One for the state tax department, if required.
Any payer who files 250 or more Form 1099 reports are requested to file it electronically. In case 250 requirements are met and filed by paper copies, the payer must submit a copy of Form 1096 to IRS. It is a summary of the information form that will be sent to the IRS. Moreover, 1096 is not required if the form is filed electronically.
Once the returns are filed with IRS, it has to send back to payees by the end of January following the year for the income items and other proceeds are paid.
The form is used to report income and proceeds only for January 1 – December 31, irrespective of the fiscal year used by the payer or payee for a different federal tax requirement.
Closing note
In this blog, we have offered insights about the types of IRS Tax Form 1099. Is it challenging for you to identify and report which income and expense in what Tax Forms? Why not take help from outsourced individual tax preparation and filing expert to ensure maximum refunds.
