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 also be reported on this form.
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, a 1099-MISC must be generated for $10 USD or more. The payer should also provide one copy of the form to the payee. Once the payee receives it, he should verify the copy once again for errors and keep it securely. The payee will require the copy of 1099 misc to report income on his tax return.
Often, individuals consider non-employee income as additional money. This is predominantly true if the amount comes up to be less than $1000 USD. However, it is important to realize that the IRS does not share the same view and you are required to report all of your income, even if the amount you received was not enough to report it on 1099 misc form. Furthermore, IRS may not appreciate if you omit income from any source; hence make sure you include all your income.
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 1099-MISC form by January 31st of the year following payment. If you are expecting a 1099-MISC and have not received it by January 31st, you must contact the organization that pays you and request a copy from them. You may also contact the IRS to request a copy. However, you will need to verify your identity before the IRS will provide you with a copy of the form.
No comments:
Post a Comment