What Is Form 1099-MISC: Miscellaneous Income?
Form 1099-MISC: Miscellaneous Income is an Internal Revenue Service (IRS) form taxpayers use to report non-employee compensation. This is generally a business payment—not a personal payment.
Independent contractors, freelancers, sole-proprietors, and self-employed individuals, for example, receive one from each client who paid them $600 or more in a calendar year. The form is also used to report miscellaneous compensation such as rents, prizes, awards, healthcare payments, and payments to an attorney.
A 1099-MISC form is one of many in the 1099 series and among the most commonly used. Taxpayers receive 1099s, including Form 1099-MISC, shortly after the end of the tax year.
- Form 1099-MISC is intended to report the income of taxpayers who are not employees, such as independent contractors, freelancers, sole-proprietors, and self-employed individuals.
- The form is also used to report non-employee compensation such as rents, prizes, awards, healthcare payments, and payments to an attorney.
- Recipients receive a Form 1099-MISC if they were paid $600 or more in a calendar year.
Understanding Form 1099-MISC: Miscellaneous Income
Form 1099-MISC: Miscellaneous Income is completed and sent out by someone who has paid at least $10 in royalties or broker payments instead of dividends or tax-exempt interest to another individual. The form is also sent to anyone who received at least $600 in:
- Services performed by someone other than an employee
- Prizes and awards
- Other income payments
- Medical and healthcare payments
- Crop insurance proceeds
- Cash payments for fish (or other aquatic life) purchased from anyone who makes a living catching fish
- Cash paid from a notional principal contract to an individual, partnership, or estate
- Payments to an attorney
- Any fishing boat proceeds
This form can also be used to report earnings from direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.
The payer must send the form to the recipient and IRS by Jan. 31. The recipient can attach the form to their tax return.
If you earned less than $600 and do not have a 1099-MISC, you must still report your income to the IRS.
How to File Form 1099-MISC: Miscellaneous Income
Copy A of Form 1099-MISC appears on the IRS website in red. This copy of the form is not intended for print, rather it is for IRS use only.
The black parts of the form can be completed and printed:
- Copy 1 goes to the recipient’s state tax department
- Copy B is retained by the recipient
- Copy 2 goes with recipient's state tax return
- Copy C stays with the payer
The payer includes their name, address, and identification number, as well as the recipient's name, address, and Social Security number.
A 1099-MISC form also has a series of boxes in which the payer will input whichever type of payment was made. That may include Rents in Box 1, Royalties in Box 2, or Non-Employee Compensation in Box 7. Other boxes that may be filled out include Box 4: Federal Income Tax Withheld and Box 16: State Tax Withheld.
All copies of Form 1099-MISC are available on the IRS website.
Special Considerations for Form 1099-MISC
The IRS is overhauling Form 1099-MISC in 2020. It will introduce a new form, called 1099-NEC: Non-Employee Compensation, starting in the 2020 tax year. Form 1099-NEC will be used to report payments to non-employees currently reported in Box 7 of Form 1099-MISC. For tax year 2019, make sure to use the 2019 version of Form 1099-MISC.
Other 1099 Forms
Here is a list of the specific 1099 forms and the purpose of each:
- 1099-A: Acquisition or Abandonment of Secured Property
- 1099-B: Proceeds From Broker and Barter Exchange Transactions
- 1099-C: Cancellation of Debt
- 1099-CAP: Changes in Corporate Control and Capital Structure
- 1099-DIV: Dividends and Distributions
- 1099-G: Certain Government Payments
- 1099-H: Health Coverage Tax Credit (HCTC) Advance Payments
- 1099-INT: Interest Income
- 1099-K: Payment Card and Third Party Network Transactions
- 1099-LS: Reportable Life Insurance Sale
- 1099-LTC: Long-Term Care and Accelerated Death Benefits
- 1099-OID: Original Issue Discount
- 1099-PATR: Taxable Distributions Received From Cooperatives
- 1099-Q: Payments From Qualified Education Programs
- 1099-QA: Distributions from ABLE Accounts
- 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- 1099-S: Proceeds from Real Estate Transactions
- 1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
- 1099-SB: Seller's Investment in Life Insurance Contract