Tag Archives: 1099

Form 1099: What you need to know

File taxes onlineA 1099 form is a tax form about which is little known by the average person. At OnlineFileTaxes.com, e-filing 1099 forms are our specialty. Often, professionals are burdened with having to file many different 1099 forms due to different forms of income over the tax year. With our reporting system, your 1099 forms can be automatically sent to the IRS for your convenience.

The 1099 has quite a few different purposes. The first purpose is that of the independent contractor, which we’ve explored the details of in a previous blog post. Those who are self-employed or freelance are given 1099 forms by employers that pay them over a certain amount of money per tax year.

The 1099-MISC is used to signify income from such business ventures as rental properties, winnings from gambling and other lottery type contests, and other miscellaneous income.

Another type of the 1099 is the 1099-INT which specializes in reporting income earned from interest on interest earning checking accounts, savings bonds that you’ve redeemed, or savings accounts.

The 1099-C is for reporting cancelled debt. For example, if you’ve settled a debt for far less than the amount owed, you must file this form to report your savings to the IRS.

The form 1099-S is used for reporting money that you’ve earned from the sale of real estate.

The 1099-DIV is given to investors whose stocks and or bonds have paid out dividends over the tax year.

Another type of this form is the 1099-B which is used to report income acquired from the sale of stocks, bonds, and mutual funds.

The 1099-R is used for reporting monetary gain by way of IRA distributions, 401K liquidations, or pension payments.

At OnlineFileTaxes.com we specialize in the e-filing of all the variations of 1099 forms. We also specialize in convenient e-filing of many other forms. For more information regarding our services provided, please visit our website.

Resources:
Online File Taxes
About.com

Share and Enjoy

  • Facebook
  • Twitter
  • LinkedIn
  • Google Plus

I GOT MY 1099-MISC – WHAT COMES NEXT?

So, we have covered the aspects of using 1099 forms for business. The most widely used of the 1099 form is the 1099-MISC, and this is what people usually mean when they say ’1099′. If you are doing nearly any type of work or service for any type of business, whether it is a single person operation or a corporation with thousands of employees, the 1099-MISC is the form that they will use to keep track of your earnings on their end. They can then deduct those as expenses.

If you have gotten a 1099-MISC from a business that you did any type of work or service for (and were not on their actual payroll), then the government has also received notice, and they will cross check 1099 forms which companies file against the individuals they show payment to.

Any time you do more than $600 in the course of the calendar year they must issue a 1099 form, and in all but a few specific cases it will be a 1099-MISC. Even if you don’t receive a 1099-MISC, if you have make $400 setting up a business’ computer system you do have to report that income. The reporting just isn’t automatic, as it is when the $600 limit is reached as with a 1099.

It is a bit of extra work for the tax payer, but the forms are fairly easy, especially if you are using some sort of software package to help with your taxes. If you are using a professional service, either online or one in your area they will take care of the forms for you. But, never forget you are on the hook if your taxpayer messes up (despite what they say).

At the least you should know what forms have to be filed, even if you are not going to fill them out yourself.

With 1099-MISC income, you will need to file a Schedule C or Schedule C-EZ (if you are filing 1040EZ). It is also on this form that you will list your deductible business expenses. It is extremely important that you document all business expenses with receipts and notations in some sort of book (or computerized records).

These deductions are separate from the deduction you get on your personal taxes, and they will come off the top of the gross income. Remember, though, if you do not have a provable paper trail of payments and receipts you will not be able to use those expenses to adjust your income properly into profit and operating expenses that will not count towards income,

The other form you will file is a Schedule SE. It is possible, especially if you started a consulting firm late in 2012 that your expenses are more than the money you have earned thus far. The Schedule SE simply shows the amount of profit you made from the business or venture after expenses, and shows how much tax you will owe on that money. If you do not show a net profit you will still use the Schedule SE but you will not owe any business taxes. You only pay taxes on net profits (that is, what is left over after all expenses have been paid).

All of these forms are fairly easy to fill out on your own if you are good with a calculator. Even if you are using a computer program or a tax professional, though, it is good to know how they are getting the number at the end of the last page. Now you should have a clear understanding of how the 1099-MISC form works, and what to do with it!

Share and Enjoy

  • Facebook
  • Twitter
  • LinkedIn
  • Google Plus