6 Key 1099 Forms for Your Business Taxes
You may have heard people refer to a "1099" or "1099 form," but there are actually 18 different 1099 forms. In this article, we'll take a closer look at six key 1099 forms you may receive or send as a business.
These 1099 forms from the IRS are some of the most important because they give information on income received by and paid by your business. The IRS calls these forms "certain information returns."
The information in this article is for the 2019 versions of these forms, used for sending information on payments to 2019 recipients and the IRS. The IRS has made some changes in 2020 versions of some forms, for reporting 2020 payments.
1099 Form Due Dates
The due date for information returns depends on the form. There are actually two due dates for each form, one for sending the form to the recipient and another for submitting the form to the IRS, and some forms have a minimum amount below which no report is due.
|Due Dates and Other Information for 1099 Forms|
|Form||For:||Min. amount||Due date - IRS||Due date - recipients|
|1099-B||Proceeds from Broker or Barter Exchange Transactions||none||Feb 28*||Feb. 15|
|1099-DIV||Dividends and Distributions||$10 or more ($500 or more for liquidations)||Feb. 28*||January 31|
|1099-INT||Interest Income||$10 or more ($600 or more in some cases)||Feb. 28*||January 31|
|1099-K||Payment Card & Third-Party Network Transactions||All amounts||Feb. 28*||January 31|
|1099-MISC||Rent, royalty, nonemployee income, etc.||$10 or more royalties, $600 or more non-employees||Feb. 28*(Jan 31 for nonemployee payments in Box 7)||January 31|
|1099-R||Distributions for retirement or profit-sharing plans, IRAs||All amounts||Feb. 28*||January 31|
|* Mar 28 if e-filed|
What Is on a 1099 Form?
The basic format for each form is to provide information on taxable income and any amounts withheld from that income for federal and state income tax purposes. Each 1099 form must include the taxpayer ID number for the person or business that receives it. The taxpayer ID is matched with the information received by the IRS and with the taxpayer's tax return.
On some 1099 forms, you may see a box relating to FATCA requirements. FATCA is the Foreign Account Tax Requirements Act, which requires reporting of assets held in foreign accounts to the IRS. The requirement to file depends on the value of your foreign assets, or those of your business.
Withholding on 1099 Forms
Because 1099 forms don't include employee income, no withholding is required to be taken from these types of income. In some cases, backup withholding might need to be taken out if the IRS determines there is a problem with the payee's taxpayer ID number.
If you receive a notice from the IRS about backup withholding, you must withhold at the current rate: 24% of the total amount paid to the worker, effective for the 2018 tax year and beyond.
All of these 1099 forms use Box 4 to report federal income tax withheld.
When You Receive a 1099 Form
When you receive a 1099 form, first make sure it has your correct taxpayer ID on it. Then compare the amounts, especially taxable income and any income tax withheld, with your records. If you see a difference, contact the company that gave you the 1099 form.
Include the information from 1099 forms you receive on your business or personal tax return. These 1099 forms are complicated, and several pieces of information go into different parts of your income tax return. Give the form to your tax preparer to add to your tax return. You may also be able to include the information from your 1099 form using personal or business tax preparation software.
If your business participates in a barter exchange program, you will receive a 1099-B form from the exchange program showing the income you received from the program during the year. The 1099-B is also used to report certain broker (investment) transactions. Broker transactions may result in capital gains, either short-term or long-term.
You may need to withhold federal income tax at the backup withholding rate and included in Box 4.
If you or your business received income from dividends during the year, you will receive a 1099-DIV form from your financial management or brokerage firm. Amounts subject to capital gains and dividends are included, along with income from the sale of collectibles.
Form 1099-INT records income from interest on savings accounts, CD's, and other financial investments. Information on this form includes amounts of interest income, early withdrawal penalties, interest on U.S. savings bonds and Treasury obligations, foreign taxes paid, and interest expenses.
Form 1099-K records payments to your business from third-party payers. If you receive payments online or in-person through a third party (like a merchant account), the income you receive is recorded and a 1099-K is sent to you to verify that income.
You don't have to complete this form, but you should keep records of all transactions from credit and debit cards and other payers like PayPal so you can verify the amount on the 1099-K.
When you receive the 1099-K form, take the time to review it and make sure everything is correct. If there are discounts, returns, and chargebacks that haven't been deducted, contact the sender of the form to make adjustments. Since the form is sent to you and to the IRS, the two versions must match to avoid questions by the IRS.
The 1099 many businesses use is the 1099-MISC. This form, as you might suspect, is a miscellaneous form that document income paid for a variety of purposes. The form must be given to someone you have paid $600 or more during the year for:
- Prizes and awards
- Royalties (for payments of $10 or more for the year)
- Payments to non-employees (including independent contractors, freelancers and outsourced services)
- other income
- attorneys in some cases.
You may also receive a 1099-MISC form if you were paid for your services through your business or as an individual.
IRS Form 1099-R
This form records income from distributions from retirement, pension, and IRA accounts. The form is given for a designated distribution from
- Profit-sharing or retirements plans
- Annuities, pensions, insurance contracts, survivor income benefit plans,
- Disability payments under life insurance contracts, and
- Charitable gift annuities, etc.
You can find more information on these and other 1099 forms from the IRS, on its General Instructions for Certain Information Returns page.
IRS. "2019 General Instructions for Certain Information Returns." Guide to Information Returns, Page 25ff. Accessed Dec. 29, 2019.
IRS. "Do I need to file Form 8938, "Statement of Specified Foreign Financial Assets"? Accessed Nov. 18, 2019.
IRS. "General Instructions for Certain Information Returns. " Backup Withholding, Page 16. Accessed Nov. 18, 2019.
IRS. "2019 Instructions for Form 1099-B." Accessed Dec. 29, 2019.
IRS. "About Form 1099-B, Proceeds from Broker and Barter Exchange Transactions." Accessed Nov. 18, 2019.
IRS. "2019 Instructions for Form 1099-DIV." Accessed Nov. 18, 2019.
IRS. "2019 Instructions for Forms 1099-INT and 1099-OID." Accessed Nov. 18, 2019.
IRS. "Understanding Your Form 1099-K." Accessed Nov. 18, 2019.
IRS. "About Form 1099-MISC, Miscellaneous Income." Accessed Nov. 18, 2019.
IRS "About Form 1099-R." Accessed Nov. 18, 2019.