Forms 1099 cause such anxiety to taxpayers as they indicate the taxpayer has received income that is not traditional income. In order to fully report all income earned, taxpayers must include all W-2s received and all Forms 1099. Forms 1099 are special information returns that designate miscellaneous income. There are several types of taxpayers that should receive Form 1099 if the payment exceeds a certain IRS-designated amount. There are many types of taxpayers who receive Forms 1099.
Form 1099 Series
The series of 1099 forms is used by the IRS to determine the income received and paid by taxpayers. There are several types of Form 1099 designated by letters or abbreviations in the form name. For example, Form 1099-A is used to report payments related to the acquisition or abandonment of secured property, whereas Form 1099-Q reports payments from qualified education programs.
A Form 1099-MISC reports miscellaneous income that is not reportable on other 1099 forms. It covers a wide variety of payments ranging from the payment of vacation allowances to golden parachute payments to independent contractor compensation payments. The Form 1099 also includes basic information about the person or entity making the payment, such as the name, address, telephone number and federal tax ID as well as the same information for the person or entity receiving the payment.
Forms 1099-MISC are required to be issued only if payments exceed certain amounts set by the IRS. In 2012, if you receive at least $10 in royalties; $600 in rent, services, prizes, awards, medical payments, crop insurance proceeds, payments for aquatic life; any fishing boat proceeds; or $600 or more in gross proceeds paid to an attorney, you must receive a Form 1099 from the person or entity that paid you.
The Form 1099-MISC covers a wide variety of payments. Accordingly, there are a wide variety of taxpayers who receive a Form 1099-MISC. The following people should receive a Form 1099-MISC if they receive payments above the IRS threshold: attorneys, independent contractors, consultants, crop insurance recipients, salesmen, directors, fishing boat crew members, fish salesmen, former employees, tribal members, successful litigants, landlords, royalties recipients and interest income recipients.
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