What Are the Most Common Types of 1099 Forms?
1099-NEC reports nonemployee compensation over $600. 1099-DIV covers dividends and capital gain distributions from investments. 1099-INT reports interest income. 1099-R covers distributions from pensions, annuities, and retirement accounts. 1099-B reports proceeds from broker transactions. 1099-G covers government payments like unemployment benefits and state tax refunds.
How Does Receiving a 1099 Affect Your Taxes?
Unlike W-2 income, taxes are not withheld from 1099 income. You are responsible for reporting all 1099 amounts and paying federal and state income tax plus, for self-employment income, the full 15.3% self-employment tax. Receiving 1099 income often requires making quarterly estimated tax payments to avoid underpayment penalties.
What Should You Do If You Receive an Incorrect 1099?
Contact the payer and request a corrected form. Do not ignore the error — the IRS receives a copy and will compare it to your return. If you cannot get a correction before the filing deadline, report the correct amount on your return and attach an explanation. Filing with a known error on an unchanged 1099 can trigger IRS notices.
Frequently asked questions
Do I have to report 1099 income if it is under $600?
Yes. The $600 threshold determines whether the payer must issue a 1099, but you are required to report all taxable income regardless of amount. Failing to report income the IRS knows about through other records increases your audit risk.
What is the deadline for receiving 1099 forms?
Payers must send most 1099s by January 31. Brokerage 1099-B and 1099-DIV forms may arrive as late as mid-February, and amended versions can arrive even later if payers receive corrected information from fund companies.