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What is 1099-MISC?

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A 1099-MISC is a type of tax form. It is used to report miscellaneous income, such as income earned as a non-employee, as well as fees, commissions, rents, or royalties paid during the last tax year. Payments for prizes, awards, legal services, and other non-employee activities may be reported on this form as well.

If a business pays you 600 US Dollars (USD) or more as a non-employee, it is legally required to report it to the Internal Revenue Service (IRS), using a 1099-MISC form. For royalty income, this form must be generated for $10 USD or more in royalties. As the payee, you’ll receive your own copy of the form. Once you receive it, you should check it carefully for errors and keep it in a safe place. You’ll need to use it to report this income on your tax return.

Often, individuals think of non-employee income as extra money. This is particularly true if it amounts to less than $1000 USD. It is important to realize, however, that the IRS does not share this view and you are required to report all of your income, even when the amount you received was not enough to require the generation of a 1099-MISC. Furthermore, you may not choose to omit income from a particular source; you must include it all.

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Any business that has paid you $600 USD or more as a non-employee, or at least $10 USD in royalties, must provide you with a this form by January 31st of the year following payment. If you are expecting one and have not received it by January 31st, contact the organization that pays you and request a copy. You may also contact the IRS to request a copy. Keep in mind that you will need to verify your identity before the IRS will provide you with a copy of the form.

Sometimes, a 1099-MISC form will arrive with errors on it. If this happens to you, contact the paying organization for an amended copy. Don’t wait too long to request your new form, as you want to ensure you receive it early enough to file your tax return on time. Though the paying company is required to send the corrected form to the IRS, it is wise to send your own copy as well. This simply protects you from unnecessary hassle caused by discrepancies in the amounts reported.

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anon953042
Post 83

My employer gave me 1099 that read $30,000, but the actual payment or salary I received is only $27,500. What should I do to correct this?

anon945489
Post 81

I have a 12 year old son who won $1000. We received a 1099misc for a contest. How do we claim it?

anon346706
Post 77

So if I buy a $1000 laptop for my company from Amazon, I have to send Amazon a 1099?

eliejulz
Post 75

I filled out my 1099 form online. I was able to fill out my form, print, save, sign, email and even fax it online. Very useful and thought I should share.

anon319778
Post 74

My husband is a medical resident and he's getting a certain amount of money from the hospital he signed a contract with as a promise to work for them once he finishes his residency.

They did not hold any taxes and sent us form 1099misc with box 7 filled out with the amount they have paid him. I was trying to do my taxes and it seems that box 7 means he's self employed which is holding taxes at a higher rate, however he's not self employed and after looking at all the different boxes his qualifies more for other income which is box 3. Is there a way to dispute this? That way he doesn't pay self employment tax, which would mean we would pay an extra $4,000, based on my calculations.

anon317786
Post 73

I sold some football tickets to a business that used them for entertainment purposes. I received a 1099 misc for for the total of all the tickets I sold to the business. Do I have to claim that as income?

I did profit a little from the sale, but I still had to pay for the face value of the tickets and the total amount of the 1099 misc was the total amount that they paid for the tickets (face value + my profit). Thanks for the help.

anon316832
Post 71

I received a 1099 from someone I do not know and for the amount of 2500.00 of which I do no recall receiving. It's a regular "copy B" of a 1099 "miscellaneous income" form. The address is a "C/O" (care-of) and a house number that is empty (for sale) here in my town. It does have my SS on it and a payer's FIN on it. What's going on here?

anon253824
Post 67

One of our independent contractors is asking for a 1099 from us when she only earned $450.00 in 2011.

Are we required to issue her one?

anon250424
Post 66

I'm a teacher and have been participating in a federal grant opportunity for a few years, coordinated by a 501(c)3 not for profit organization that supports math and science instruction in our state. We're compensated hourly for our time; it usually amounts to less than $1000 or so for the year. They always send a 1099-MISC, with box 7 filled in.

Every time I use any tax software it wants to treat me as though I'm running a business. I read in one of the posts that a 1099-MISC is issued if I've provided them with goods or services, neither of which is true in this case.

I've asked my grant coordinator if this is the right box, but it's not her call and she really doesn't know anything about it. I hate doing my otherwise simple taxes every year because this little bit of income is so annoying to deal with.

anon249989
Post 65

Is foster care by a biological parent taxable now? I received a 1099 from one HCS agency and the other HCS agency said they were not issuing 1099's because it was not taxable. Now what should I do? Report only the 1099 I was issued because I am not getting one for the first half of the year when I was with the first HCS agency?

anon245031
Post 64

In MI do you claim workman's comp on your w-2 when you file?

anon244452
Post 63

I'm a small business owner and confused about the 1099 C. My client attached a purchas to my income on this. I purchased the product and was reinbursed by them to use the wax on there site. The purchase wasn't income but will be taxed as income if there. They claim the material is to reflect the 1099 C?

anon244445
Post 62

I received a 1099-misc with only box 9 checked (payer made direct sales of $5,000 of consumer products to recipient for resale). That's it; no other box has info in it. The product ordered from the company was all for personal use, never sold. What do I need to do with this?

anon243594
Post 60

I worked as a youth league umpire and received a 1099-misc Box 7 as non-employee compensation? Do I have to claim it as income on my 1040? Thank you.

anon239032
Post 59

I got a letter from the IRS today saying that I owed them $3,369. It said it was from two 1099s from unemployment that was filed a little over 2 grand short and a 1099 misc. from a credit card I paid and settled on, but I never received a 1099 misc from them from the get go so I couldn't file that, but since I gave all my unemployment 1099's to a tax person to file, would that come back on him or me? Please help. I don't have $3,400 bucks to fork over.

samaylor
Post 58

I received a W2 for work completed during first quarter 2010. Then I started working for myself during the third quarter 2010, and received a 1099 for work completed.

Do I file only under 'self employed'?

anon166934
Post 57

I received a message requesting my tax ID from a new client saying they were issuing me a 2010 1099. However the client did not return his client agreement, and I did not receive his payment until January of 2011. The payment was prepayment for services to be performed in Jan, and Feb of 2011. His client agreement was returned to me on Jan 4 though dated December 31, 2010. His check received in Jan was also dated December 31, 2010 though not received until a week later. I have already filed my taxes not including this payment (I show it as 2011 income).

Do I have to refile my taxes? Or is there a way for this to be 2011 income for me, yet a 2010 expense for my client?

anon165393
Post 56

This is regarding to the 1099- misc form:

I was working in a internship at NASA Goddard Space Flight Center, Maryland. I want to know if I have to file this form? If they paid me 6,000, I have to file this form?

anon161555
Post 55

I received a 1099 MISC that included money I received on the sale of a private company where I held shares, which is a long term gain. It was not a public company, and so was not handled through a broker and therefore not a 1099B. The company that issued the 1099 MISC was actually a law firm that handled the deal, and held the proceeds of the sale in trust until they distributed it to me.

The IRS will receive this 1099 MISC, and I will be reporting the income as a line in Schedule D. Is that okay, or will the IRS be looking for 1099 MISC income to be reported somewhere else than Schedule D?

Fosterparent
Post 54

I would like to add to post #52. Some foster care agency are choosing who they give 1099's to. It appears that only "biological parents" are being targeted. My question is: Is this legal? And secondly, do they have to give some notification as to the change in the policy or procedure prior to distribution?

anon152294
Post 52

When did the I.R.S. change the law regarding payments for Foster Care to individuals who took care of their disabled or handicapped children due to the fact that State agencies did not have enough facilities/staff to do the job?

These payments have never been taxable, so when did that change? Was this an act of Congress, a court decision, or what was the legal basis for this change? Why are State agencies now issuing 1099-MISC forms? Was this part of the so-called "ObamaCare" legislation that nobody ever read?

Mgonzalez
Post 51

My husband has worked with the same company for the last 16 years. This past year they had to work out of town but out of obligation they were told if they did not go they would no longer have a job.

Knowing that the economy has been in the trouble that its been in, he agreed to go. A few days ago he received his W2 and with the W2 he also received a 1099 form for non employee compensation. Which i don't understand why they would do that when i thought that since they obligated them to go and work out of town why they would be giving him that form. Please help. Thanks. -confused

anon148872
Post 49

I got a 1099 for $745 dollars. what are the steps i should take and how much will i have to pay in taxes?

anon147614
Post 48

#40 let's be real. You would have known how they were planning on reporting the money given to you, when they either had you fill out a W-4 or W-9. You would have also noticed that you had no taxes withheld. I believe you were cool with everything until you seen that you were actually going to be liable for taxes still. How does one know you didn't lie on your determination form at the direction of your CPA?

anon147504
Post 47

I work for a the county that offers daycare for children and they sent me a 1099-misc. The county worker that hired me said i don't need to file. what should i do?

anon147452
Post 46

I received a 1099-misc from my property management company for the rental of my home. The rental took place in December 2010, but I was not paid until late January 2011. I was sure a 1099-misc should only be issued for paid invoices and was expecting this to be filed for 2011. Is it ok they have issued this on an accrual basis? I'm a little fearful I will receive one next year for this same rental. Thanks.

anon144851
Post 45

you may amend your tax return and report the 1099 and claim expenses (follow IRC for expense claim) against the income reported for 1099.

anon143638
Post 44

Do I have to send a 1099-Misc to a cabinet shop who is an LLC that supplied and installed cabinets? Do I only report the installation portion of the invoice or do I report the entire invoice?

keshannaw
Post 43

I worked as a server for a friend of a friend who has a small catering company during 2010. I estimate I made about $2000. When I asked him about receiving a 1099 he told me he doesn't give those out. My question is when I file my taxes can I still report that income without the 1099?

anon125057
Post 41

i work full time in a company and received cash payments. currently I'm looking into buying a home but i would need a tax return. how do i declare my income to the IRS as employee and not get the company i work for in trouble?

anon94733
Post 40

I went through what this poster describes and he is exactly right, despite what another poster says.

My story: I got a 1099 instead of W2 (employer wanted to avoid paying fair share of taxes). I filed an SS-8 form (employee determination) with the IRS - Employer fired me for filing SS-8. I could not collect unemployment as the state has no w2 earnings on record for me. The IRS determined (after a year long wait) I was an employee and should have received a w2.

I took my case to state unemployment and have been reporting for unemployment for over a year with no resolution still from state unemployment (haven't received a dime despite the IRS saying I actually was an employee).

Long story short: I ended up having to do a filing extension with IRS to wait to see my filing status form determination (w2 or 1099). I never got it and I had to file a 1099 with a large tax bill and penalties for late filing (1099 was on their records and I was not sure if filing as w2 would screw things up). Now the ss-8 determination come in and says I am w2 and I have to pay a cpa to file an amended return and hope things come out better for me tax wise.

It's still a pain and a large expense outlay and effort for me to try to rectify this.

It is amazing to me the employer can get away with this and there is really no punishment for them as the IRS and state unemployment agencies are so backlogged.

In the meantime, the employee suffers and has no recourse. I can imagine most would just give up and the employer wins but I decided to see this through and it has been very painful and time consuming.

Make no mistake -- the system is set up to favor the liar and tax cheat and let the employee fend for themselves. Think long and hard before deciding to stand up for what is right because yo will likely be fired and it will take years to clear it up and you will probably end up with no recourse.

And don't even think that whistleblower protection will do anything for you. My attorney laughed when I asked if that could be used to apply more pressure to the employer to get a resolution.

I totally disagree with the posters assertion that "it won't affect you personally..." and "employer will get fined...." It will affect you personally, as you will likely get fired and have no recourse.

Here is the original post I referred to:

"To everyone getting a 1099 for W2 work: your employer is committing tax fraud, and you are being ripped off.

The 1099 is going to be reported to the IRS, which means the IRS will bill you for taxes due on that amount.

If you worked as a W2, those taxes should have been withheld during the year. In fact, it's required by law. You're also going to end up paying twice as much for social security as you should. You also will not be eligible for unemployment, or even workman's comp if you get injured.

Contact the IRS, and they will deal with the company very harshly. It won't affect you personally, except to your benefit because you won't end up owing taxes you shouldn't pay. But the company will get fined."

anon76617
Post 39

I am retired and drawing disability since June 2009. Some of the people I was involved with at work took up a collection for my retirement three years prior to my retirement and put it in a non-qualified deferred compensation fund.

I am now given the money in three lump sums over a period of three years= 150,000 dollars.

I received a 1099 -misc. for the first year under non-employee compensation and I am having to pay taxes plus social security taxes on this. Was this the right 1099 form to receive or the right box on the form to be checked? Is it ordinary income and what taxes should I be paying?

anon74716
Post 38

I am an employee, but my boss is giving me a 1099-MISC and treating me like if I were a contractor. What should I do?

anon74236
Post 37

A company that I quit working for reported income to the IRS for two years on me after I was gone, as a 1099 paid employee. What happens if I was not working but reported to the IRS as working?

anon72850
Post 36

My husband received a 1099-MISC as a beneficiary from the Army with regards to my late son. Turbo Tax keeps wanting me to fill out a Schedule C and report it as business income. What do I do?

anon70514
Post 35

does anyone know what is the tax rate for the income declared in this form?

gdm8287
Post 34

I retired in February 2010. After I had e-filed my 2009 taxes, I received a 1099 Misc with $610 in box 7 as a non-employee. This was an incentive payment for 2009 safety, but because they paid it in March 2010 they say I was not an employee. How do I correct this and is it even legal?

anon69461
Post 33

I received payment in 2009 for work done on a contractor basis, however the company has yet to send a 1099-MISC - it's now March. I have contacted the company and have gotten no response. What should I do?

anon66725
Post 32

What happens if someone sends you a 1099 for money they did not give me? They don't have a W-9 from me and they used my social security number without my consent instead of my LLC tax ID number.

Is that legal? What options do I have to not pay taxes on money I didn't get, and avoid the IRS flagging a discrepancy with my SSN#?

anon65519
Post 31

I was given a total of $180 in honorariums. Do I need to claim this on the federal and/or VA returns? If so, where?

anon60596
Post 30

I worked for cash as a nanny for 6,450 this year. how would i file this? would i get a tax return? would i use the 1099-MISC form?

anon60072
Post 29

I gained about 1 million dollars as self employed and i don't know how to file my taxes. what do i do?

anon58949
Post 28

Contrary to what I will repost below, it is permissible to be paid and annotated using a 1099-MISC form, in lieu of a W2. Here is the post with incorrect information:

"To everyone getting a 1099 for W2 work: your employer is committing tax fraud, and you are being ripped off. The 1099 is going to be reported to the IRS, which means the IRS will bill you for taxes due on that amount. If you worked as a W2, those taxes should have been withheld during the year. In fact, it's required by law. You're also going to end up paying twice as much for social security as you should. You also will not be eligible for unemployment, or even workman's comp if you get injured.

Contact the IRS, and they will deal with the company very harshly. It won't affect you personally, except to your benefit because you won't end up owing taxes you shouldn't pay. But the company will get fined."

That post is, well, bunk! The IRS authorized reporting of wages using a 1099-MISC, but yes, the recipient of wages is liable for all taxes that would normally be with held is reported using a W2.

To wit: An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required, during which time she or he may be subject to the Law of Agency.

Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company, which they themselves own, or may work through an umbrella company. Hence, reporting of wages using a 1099-MIsc is not a violation of any law.

anon55281
Post 27

To everyone getting a 1099 for W2 work: your employer is committing tax fraud, and you are being ripped off.

The 1099 is going to be reported to the IRS, which means the IRS will bill you for taxes due on that amount.

If you worked as a W2, those taxes should have been withheld during the year. In fact, it's required by law. You're also going to end up paying twice as much for social security as you should. You also will not be eligible for unemployment, or even workman's comp if you get injured.

Contact the IRS, and they will deal with the company very harshly. It won't affect you personally, except to your benefit because you won't end up owing taxes you shouldn't pay. But the company will get fined.

anon47981
Post 26

I just received a garnishment on an independent contractor who receives a 1099-misc. Do I have to honor the garnishment since he is not an employee?

anon41351
Post 24

I have been out of work in the construction industry for some time and have been receiving Unemployment benefits. I was asked to help a friend on a job for two weeks and will now get a 1099 for the time worked. How will this affect my Unemployment benefits and how do I know how much money to put aside for the taxes due on the 1099?

anon36882
Post 21

IS a 1099 considered being a business owner?

sam7
Post 20

I received a 1099 from an insurance company on a deck I built (destroyed by a car accident). The owner had gotten a bid from the insurance company's contractor, then decided to go with me.

They issued a check for the original bid amount to the *owner/me*. I signed the check and the owner paid me directly (my bid was significantly less than the original contractor's bid).

How do I get this adjusted? I don't want to pay taxes on money I didn't receive.

cleemark
Post 19

I belong to a private, nonprofit golf club. We recently had a Membership Drive. The incentive was for members to get $30 per month off their dues for 12 months for every new member they sponsored. If a member sponsored more than one new member, their dues were reduced in increments of $30. Does the club need to issue 1099's to those that took advantage of the incentive and whose due's deductions add up to $600 or more in the calendar year? Would giving the member a non-accumulating $30 certificate for food in the club dining room or Pro Shop have been a better option? Would the certificates also be considered monetary compensation requiring 1099's? Thanks for any help in this matter.

anon27464
Post 18

My daughter is a graduate student. She applied for and won a research grant. She was sent a 1099 misc. for approx. $2500.00. She used the money for research and travel expenses in the pursuit of her degree. Is this money taxable?

anon26928
Post 17

I received an out of settlement 1099-Misc, they placed the amount in Box 7, no matter what I do Turbo Tax wants to move it to Box 3 and states I should get a corrected 1099 from this ex- employer. Is Turbo Tax correct, because I really do not want to have any contact with this corporation ever again!

BWallender
Post 16

I received a 1099 for 11,000.00 for selling a horse to a lady in Michigan for her daughter for recreational riding. How can I dispute this? or is it accurate?

kdp11
Post 15

How do I dispute a 1099 misc. I received since all the money the company paid me is on my w-2 they sent?

RandallD
Post 14

I was laid off from work last year, and was paid out $1000 on a 1099-MISC. It was from Central States Indemnity, a Supplemental income insurance. I'm not sure how to handle this with TurboTax. Please help It's not earned income I'm not sure how to claim it.

hannah526
Post 13

I have a business that I need to give a 1099 to .. My question is I have a gross amount then I subtracted some costs they incurred (labor and supplies) and then I have the net I actually paid. Which amount do I report ... the gross with expenses that they can deduct or net with the expenses already deducted?

marie20
Post 12

A friend in NY state owns a medical billing company (as an LLC). She has several paid employees and needs additional people to work for her but doesn't want any additional "employees" taxes- I live in Maine and would like to do work for her. Can she pay me as a consultant/freelance and then just submit a 1099 at the end of the year, so I would be responsible for taxes? Is there anything else I would need to fill out, such as a NYS DBA (I do have a second residence in NY)?

amsfer
Post 11

I just filed my taxes, which included two w-2 forms and one school thing...Then I got a 1099. I forgot about in the mail. So I file an amendment 1040x? and I adjust the income earned and then it will tell me I owe $$$???

jdlarosa1978
Post 10

I am a self employed medical provider and have paid another single entity 50% of my gross income for business expenses (billing, business supplies, etc). This 50% I paid to the other entity, should I generate a Misc. 1099? Thanks for the help.

anon22027
Post 9

I was having a discussion (bordering on altercation, lol) with a co-worker and we were curious what would happen if someone received a 1099-misc for say under $1000 and did not include it in his 1040 filing? Would the IRS pick it up automatically or just on audit? Can you help clarify this for us? Thank you.

anon10979
Post 8

Can I be a regular employee of a company (getting W-2 and other benefits from that company) and also work part time (as a freelancer) for another company who issues 1099-MISC form for my money earned through them?

whatnext
Post 7

If I rent rooms out of the same house I occupy, am I obligated to put the rent they paid me on a 1099-MISC form to be sent to the IRS? If so, how do I obtain this form?

anon9432
Post 6

I just started my LLC in 2007 and did some contracting work for another business. The total they paid me was more than $600. Are they required to send me a 1099-MISC, or am I considered a corporation not required to report this income? Also, is it too close to the deadlines for filing to do anything about this? What do I do next??

nico2me
Post 5

I am in the process of doing my tax return but I have not received my 1099 misc yet. The company I did business with is now out of business. If I estimate the amount I received from them last year, what other forms do I need to send to the IRS when I file my return?

anon7902
Post 4

What happens if I am a W-2 employee of a contract house and the employers still persist in sending me a 1099? They say that it is only for "internal" use and is not being reported to the IRS. Do I have any recourse other than quitting?

Ebonyj30
Post 3

Question: I worked Part time for a Local Hospital. I received in mail a 1099 Misc. When I enter the data (wage) online under the enter 1099 Misc section of TaxTurbo, I end up owing $$. However, if I instead enter the wages under the W2 section, online TaxTurbo, I am then due a refund. Please help/explain. Either way it's income, so why do I owe if I enter wages as 1099 Misc vs W2 wages?

Moderator's reply: As a 1099 contractor, you are responsible for paying your social security tax, or self employment tax, yourself. Normally, if you are a regular employee, your employer pays half of this tax, and you pay the other half. If you are considered a contractor, and receive a 1099, then you are responsible for the entire (currently 15%) amount. check out these articles for more info: What is a 1099 Contractor? and What is Self Employment Tax?

anon6768
Post 2

With the amended return file form 2106 showing what you actually paid for allowable expenses. The difference between your per diem and actual expenses are taxable

justcurious
Post 1

Hi, This is regarding 1099-MISC.

I worked for a company during year 2006 and they used to pay me per diem money for my expenses( with no receipts ) since I worked in client location out of state from my office. At the end of the year, they sent me a w-2 and this did not include the per diem money. I have filed my tax returns based on w-2.

Now my previous employer has sent me a 1099-MISC form which includes the per diem money as taxable other income and he has reported that as taxable to IRS.

Now, if I file a tax amendment, is there any way I can get some tax exemptions for this per diem money. Otherwise I might end up paying huge taxes for the per diem money now.

Please help.

Thanks

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