There are many conflicting opinions you’ll read on line and get from CPAs and tax preparation specialists about when to file a 1099 as a business and how to prepare your taxes as an individual receiving a 1099 Form. As an enrolled agent Ken Weinberg attends hours of continuing education regarding the tax code, is on the phone daily with the IRS, and as someone specializing in tax strategies for the self-employed, Ken knows the ins and outs of everything 1099. For your specific question, call Ken, fill out the contact us form, or schedule a free consultation.
The Eight Types of 1099 Forms
First thing, there are eight different types of 1099s:
Form 1099-MISC is the Most Common
When it comes to running a small business and determining when to provide a 1099, many CPAs will tell you that it’s mandatory to give each individual, contractor, vendor or consultant you have paid $600 to, or more, a 1099. There are many exceptions to this rule and before you go writing out 1099s for every person or company that you’ve paid $600 or more to for a service, call Ken-Mar Tax.
If you have received a 1099-MISC that usually means you are self-employed and entitled to an ensemble of tax deductions for the self-employed. For example, do you do any work at home? On your home computer? Do you buy supplies like printer paper, business cards, or any other home office supplies – staples, paper clips, etc. These can all be attributed to the use of a home office and depending on how much of your home is your dedicated office space, you could be entitled to deducting partial electric, rent, gas, phone and internet payments. If you receive a 1099 form, call Ken-Mar Tax to make sure you’re claiming all the business expenses your entitled to and that you are not paying too much in taxes.
Form 1099-K Tracks Credit Card Payments for Your Business
Do you drive for Uber or Lyft? Do you provide consulting and take credit cards? Do you sell items on Amazon, eBay or Etsy and take credit card payments through a merchant services provider? If so, you will receive a 1099-K reporting all your third party network transactions, or credit card payments. Just like the 1099-MISC, this form typically means you are self-employed and entitled to tax deductions you may not have even thought of. Make sure you contact Ken-Mar Tax. We’ll review your last return for free and help you file a new one if you didn’t maximize your self-employed tax deductions and business expenses. For more information, even if you don’t drive for Uber, get an idea of what types of business expenses you might have by reading “Don’t Miss Tax Deductions for Uber, Lyft and other Ride Share Drivers.”
Form 1099-INT, 1099-DIV & 1099-R
Unlike the 1099-MISC and 1099-K, these 1099 forms don’t necessarily indicate you should be looking to maximize self-employed tax deductions. Form 1099-INT is what you’ll use for interest paid on a business debt to someone, excluding interest on an obligation issued by an individual, Form 1099-DIV is required for dividends or other distributions to a company shareholder, and Form 1099-R stands for retirement distribution for a retirement or profit plan or from an IRA or insurance contract.
More 1099 Forms for Receiving Payments
Although much less common, you may be required to file any of the following 1099 forms in these cases: Form 1099-S for the sale or exchange of real estate, Form 1099-B if you are a broker and you sold a covered security belonging to your customer and Form 1099-A is used when you’ve released someone from paying a debt secured by property or someone abandoned property that was subject to the debt or otherwise forgave their debt to you (Form 1099-C).
