The Low Down On The 1099 Form
What is a 1099 form?
A 1099 form is a tax for issued to report other or self-employed income. This could be used to report earnings from freelance work or from selling your written work to others. The form is also used to report rental income and other non-w2 incomes sources.
When am I required to file a 1099?
You are required to file a 1099 when you file your taxes if you make more than $10 in interest on bank accounts and if you make more than $600 from the following sources. Rents;
Services performed by someone who is not your employee:
prizes and awards;
other income payments;
medical and health care payments; (this does not include pre-tax premiums paid.)
crop insurance proceeds;
cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish;
generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
payments to an attorney; or
any fishing boat proceeds.
Who does the ACA effect my filing a 1099?
The short answer is it does not. The irs aca reporting is done on a different form known as the 1095-a form (irs aca reporting form), which states the months you had subsidy to pay for your healthcare that was purchased through the ACA marketplace.
A brief overview of the 1099 instructions
The instructions are lengthy and cover every aspect of the form, but the take aways would be the following. Not all income needs to be reported on a 1099 form this would include
Payments to some corporations and LLC’s.
Payments for storing property or use of your telephone
Rent paid to realtors or property managers.
Anything that is W-2 related
Canceled debts
Attorneys fees
Basically if it is less than $600, you may not have to report it, but please read all the instructions thoroughly before you file. Alternatively, you could consult a tax preparer if you feel you need to. It is important to note that you dont have to have the form to file your taxes as it can be filed at a later date. (see page 1 of the instructions for deadlines)
Mistake and the deadline to file
If you see that there is a mistake on your 1099 form, then you have a duty to contact the issuer and request a correct form be sent to you by April 15th which is the deadline to file taxes but not the 1099. In some circumstances the 1099 can be filed later than the deadline. If the form does not reach you in time, then you can request an extension to file if you think it needed.
Any questions?
If all of this is still Chinese to you, then please seek the guidance of the IRS at 1-800-1040 or seek the help of a qualified tax preparer. This is not a form that everyone has to file normally so it can be a bit tricky to get your head around it at first.