What is an IRS 1099 form?

A 1099 form reports various types of income generated by a taxpayer during the year. An IRS 1099 is significant since it is used to report a taxpayer’s non-employment income. 1099 may be sent for cash dividends received for stock ownership or interest income generated from a bank account.

The many types of 1099s.

1099-INT
A 1099-INT is sent to taxpayers if they earned more than $10 worth of interest in the tax year. Typically, banks, brokerage firms, and other investment firms send out a 1099–INT.5

1099-DIV
A 1099-DIV is typically sent to a taxpayer if dividend income was earned throughout the tax year. Dividends are usually in the form of cash payments that are paid to investors by corporations as a reward for owning their stock or equity shares.6

1099-G
A 1099-G is sent to those who received money from the federal, state, and local government. For example, taxpayers who received a local tax refund or unemployment benefits would likely receive a 1099-G.7

1099-R
A 1099-R is issued if a taxpayer received a distribution or payout from a pension, retirement plan, or individual retirement account (IRA). Also, certain annuities and life insurance contracts may issue a 1099-R. However, not all retirement distributions are taxable, and a tax professional should be consulted if you’re unsure whether you should pay taxes on a distribution.8

1099-B
A 1099-B is sent to a taxpayer listing the various transactions from a broker, such as the sale of stocks, commodities, and other securities. Also, some types of bartering transactions executed through a barter exchange would be listed and reported on a 1099–B form.9

1099-S
A 1099-S is issued to taxpayers for real estate transactions if they had closed a sale or an exchange during the tax year. Some examples of real estate transactions could be realizing gains or proceeds from the sale of land, commercial and industrial buildings, as well as residential properties, such as a home or condominium.10

As a reminder, please consult a tax professional since the proceeds realized from a real estate transaction could be exempt from taxes, depending on the taxpayer’s particular financial situation.11

1099-MISC
A 1099–MISC is typically issued for income that falls outside the other 1099 forms. For example, some types of non-employment income are reported on a 1099–MISC, such as money received from prizes or awards.3

1099-NEC
The IRS has made changes to its reporting requirements for non-employee compensation. Beginning in the 2020 tax year, businesses are required to report some types of non-employee compensation on form 1099–NEC. In the past, form 1099-MISC was used.12

Form 1099-NEC must be filed if a business paid a non-employee $600 or more in the tax year. A non-employee might be an independent contractor or any person hired on a contract basis to complete work, such as a graphic designer, writer, or web developer.

Taxpayers who were self-employed, performed freelance work, or had a side gig that earned more than $600 in income may receive a 1099–NEC form. However, non-employee income could also include fees, benefits, commissions, and royalties. Payments to an attorney that exceeded $600 for the tax year must be reported on a 1099-NEC as well.1

Although self-employed taxpayers who earned less than $600 may not receive a 1099–NEC, they still must report all income when filing their taxes. A copy of the 1099-NEC form and the instructions are located on the IRS website.1314

Robert W. Wood “10 Things You Should Know About 1099s.” Jun 27, 2021

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