5 Most Common 1099s

What the $%^& is a 1099!?

What are they? – A 1099 form is used by the recipient and the issuer to report non-employment income to the IRS. There are 22 different kinds issued for a variety of reasons so we’re only covering what I view as the 5 most common from my time preparing tax returns.

1099-NEC

 It’s similar to its cousin, the W-2, which most readers will be familiar with. The difference is that the person or entity you are issuing the 1099 to is not your employee, but someone who performed a service for you in excess of a $600 threshold. For example, Royco Construction pays Sally from Sales Inc. $1000 to make some sales calls to help drum up business. Since Sally is not an employee and received more than $600 Royco will issue Sally a 1099-NEC.

1099-DIV

               The 1099-DIV is a variant of the 1099 form that you generally come across when working with your individual tax return. It is commonly issued by financial institutions if you’ve received dividend income throughout the tax year.

1099-INT

               The 1099-INT is extremely common and is issued to an individual by a bank if they received more than $10 in interest during the year. If you have a sizeable amount of savings or are using a High-Yield Savings account you’re likely to run into this form around tax season.

1099-B

               For all my fellow investors out there the 1099-B will be issued to you if you sell stock (Hopefully at a sizeable gain) during the tax year. It will be sent to you by your brokerage and shows your gains and losses throughout the year. Your brokerage will also be remitting a copy to the IRS so it is wise to make sure your tax return accurately reflects this statement.

SSA-1099

               Finally, we have the SSA-1099 which many of my more mature readers will be familiar with. This variant of the 1099 is issued by the Social Security Administration and it allows you to report you guessed it! Social Security payments made to you throughout the year. In most cases not all of the Social Security payments you receive throughout the year will be taxed and there are many different variables that influence this.

 Conclusion

These are the 5 most common 1099 types I’ve seen preparing personal and business tax returns. If you have any questions on how to properly report them or need further assistance with tax matters Braden River Bookkeeping is here to help. We are approved by the IRS to prepare tax returns and have a network of experienced accountants who can answer all of your questions. Reach out over the phone at 941-526-8435. Or send me an email at Nick.Horn@bradenriverbookkeeping.com. Happy tax season!