Understanding the Different Types of 1099 Forms

Tax payers that work as independent contractors or receive income in addition to their salaries must provide information to the Internal Revenue Service (IRS) to differentiate the types of income they receive. This will help to establish accurate amounts for self-employment or estimated taxes due to the IRS. Both individuals and businesses are required to file 1099 forms for each recipient that receives $600 or more in a tax year.

Different types of 1099 forms

There are a number of different types of 1099 forms. Understand the purpose of each form to know which forms are applicable for you to file with the IRS.

  • 1099-MISC: This form is used to report miscellaneous income received by individuals and businesses. This includes freelance work, rent, prizes, and awards, or healthcare payments.
  • 1099-INT: This form reports interest paid or interest income received from a bank, savings and loan, or credit union. File Form 1099-INT for each person:
    • To whom you paid amounts reportable in boxes 1, 3, and 8 of at least $10.
    • For whom you withheld and paid any foreign tax on interest.
    • From whom you withheld (and did not refund) any federal income tax under the backup withholding rules regardless of the amount of the payment.

  • 1099-A: Acquisition or Abandonment of Secured Property, is used to report foreclosure on a property and may come into play when your mortgage lender foreclosed on your property and canceled some or all of your mortgage, or sold it.
    • For whom the broker has sold (including short sales) stocks, commodities, regulated futures contracts, foreign currency contracts (pursuant to a forward contract or regulated futures contract), forward contracts, debt instruments, options, securities futures contracts, etc., for cash;
    • Who received cash, stock, or other property from a corporation that the broker knows, or has reason to know, has had its stock acquired in an acquisition of control or had a substantial change in capital structure reportable on Form 8806, Information Return for Acquisition of Control or Substantial Change in Capital Structure; or
    • Who exchanged property or services through a barter exchange.
  • 1099-C: File Form 1099-C for each debtor for whom you canceled, forgiven or discharged $600 or more of a debt owed to you if:
    • You are an applicable financial entity.
    • An identifiable event has occurred.
  • 1099-CAP: File this form for Changes in Corporate Control and Capital Structure – for the shareholders of a corporation if control of the corporation was acquired or it underwent a substantial change in capital structure. This form is furnished to shareholders who receive cash, stock, or other property from an acquisition of control or a substantial change in capital structure.
  • 1099-DIV: This form is is used by banks and other financial institutions to report dividends and other distributions to taxpayers and to the IRS
  • 1099-G: This form reports government payments such as unemployment compensation, state or local income tax refunds, and agricultural payments. Federal, state, or local governments file this form if they made payments of:
    • Unemployment compensation.
    • State or local income tax refunds, credits, or offsets.
    • Reemployment trade adjustment assistance (RTAA) payments.
    • Taxable grants.
    • Agricultural payments.

They also file this form if they received payments on a Commodity Credit Corporation (CCC) loan.

  • 1099-H: The Health Coverage Tax Credit (HCTC) Advance Payments Form is filed if you received any advance payments during the calendar year of qualified health insurance payments for the benefit of eligible trade adjustment assistance (TAA), Reemployment TAA, or Pension Benefit Guaranty Corporation (PBGC) pension recipients and their qualifying family members.
  • 1099-LS: The Reportable Life Insurance Sale Form is filed if you are the acquirer of a life insurance contract, or any interest in a life insurance contract, in a reportable policy sale. See the Instructions for Form 1009-LS for complete filing requirements.
  • 1099-LTC: The Long-Term Care and Accelerated Death Benefits, Form allows individual taxpayers to report long-term care (LTC) benefits, including accelerated death benefits. Payers include insurance companies, governmental units, and viatical settlement providers
  • 1099-OID: This form is used to report a special type of interest from certain bonds that were issued at a price less than the value you can redeem them for once the bond matures.

When to file Form 1099-OID:

    • If the original issue discount (OID) includible in gross income is at least $10.
    • For any person for whom you withheld and paid any foreign tax on OID.
    • From whom you withheld (and did not refund) any federal income tax under the backup withholding rules even if the amount of the OID is less than $10.

  • 1099-PATR: The Taxable Distributions Received From Cooperatives is filed for each person:
    • To whom the they paid at least $10 in patronage dividends and other distributions described in section 6044(b).
    • From whom they withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.
  • 1099-R: This form reports payments of matured or redeemed annuity from pensions, profit-sharing plans, and individual retirement accounts (IRAs). File Form 1099-R for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from:
    • Profit-sharing or retirement plans.
    • Any individual retirement arrangements (IRAs).
    • Annuities, pensions, insurance contracts, survivor income benefit plans.
    • Permanent and total disability payments under life insurance contracts.
    • Charitable gift annuities, etc.
  • 1099-S: This form is used to report the gross proceeds from the sale or exchange of real estate and certain royalty payments. Generally, you are required to report a transaction that consists in whole or in part of the sale or exchange for money, indebtedness, property, or services of any present or future ownership interest in any of the following.
    • Improved or unimproved land, including air space.
    • Inherently permanent structures, including any residential, commercial, or industrial building.
    • A condominium unit and its appurtenant fixtures and common elements, including land.
    • Stock in a cooperative housing corporation (as defined in section 216).
    • Any non-contingent interest in standing timber.

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  • 1099-K: This form is used to report third-party network transactions, such as credit card sales, PayPal transactions, and other types of electronic payments. The purpose of the form is to improve voluntary tax compliance. You should receive Form 1099-K by January 31 if, in the prior calendar year, you received payments:
    • From all payment card transactions (e.g., debit, credit, or stored-value cards), and
    • In settlement of third-party payment network transactions above the minimum reporting thresholds as follows:
      • For returns for calendar years prior to 2022:
        • Gross payments that exceed $20,000, AND
        • More than 200 such transactions
      • For returns for calendar years after 2021:
        • Gross payments for goods or services that exceed $600, AND
        • Any number of transactions
  • 1099-Q: This form reports distributions from qualified education programs, such as Coverdell Education Savings Accounts and Section 529 and 530 college savings plans. File Form 1099-Q if you:
    • Are an officer or an employee, or the designee of an officer or employee, having control of a program established by a state or eligible educational institution.
    • Made a distribution from a qualified tuition program).

1099-QA: The Distributions from ABLE Accounts Form must be filed by any State or its agency or instrumentality that establishes and maintains a qualified ABLE program must file this form with the IRS for each ABLE account from which any distribution was made or which was terminated.

  • 1099-SA: This form reports distributions from health savings accounts and Archer Medical Savings Accounts.File Form 1099-SA to report distributions made from a:
    • Health savings account (HSA).
    • Archer Medical Savings Account (Archer MSA).
    • Medicare Advantage Medical Savings Account (MA MSA).

    The distribution may have been paid directly to a medical service provider or to the account holder. A separate return must be filed for each plan type.

Filing your 1099 form

It is important to understand the different types of 1099 forms and which of these you are required to file to ensure compliance with IRS requirements. Failure to file the relevant forms can result in penalties.

Businesses can file their 1099 information returns for free using the IRS’s all new Information Returns Intake System portal.

The best practice for the self-employed is to keep accurate financial records for tax-deductible expenses and taxable income. Software solutions such as QuickBooks can help manage independent contractor tax liabilities and is beneficial for recording and tracking your expenses and earnings.

At Fusion, our CPAs can set up your accounting software for accurate recordkeeping to ensure you are make accurate and timely submissions to the IRS. We can also help you fill out the relevant 1099 form and help you establish which forms you need to submit, if you are uncertain about how to approach this.

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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.