Understanding Common IRS 1099 Forms
Many taxpayers are familiar with Form 1099-NEC, but the IRS 1099 series includes many other forms that report different types of income. If you receive one, the IRS received a copy too, so it’s important to know what it represents.
1099-B – Proceeds from Investments
You’ll receive a 1099-B if you sold stocks, mutual funds, ETFs, cryptocurrency, or other investments. It reports what you sold, when you sold it, how much you received, your cost basis in most cases, and whether the gain or loss is short-term or long-term.
1099-DIV – Dividends
If you earned dividends from stocks or mutual funds, you may receive a 1099-DIV. It reports ordinary dividends, qualified dividends, and sometimes capital gain distributions or foreign taxes paid. Even reinvested dividends are taxable.
1099-INT – Interest Income
Banks and financial institutions issue 1099-INT when you earn interest, such as from savings accounts, CDs, bonds, or brokerage accounts. Most interest is taxable, though some government bond interest may have special rules.
1099-G – Government Payments
This form is commonly issued for unemployment benefits and state tax refunds, along with some other government payments. Whether a state tax refund is taxable depends on whether you itemized deductions the prior year.
1099-R – Retirement Distributions
You’ll receive a 1099-R if you took money from pensions, IRAs, 401(k)s, annuities, or other retirement plans. It shows how much was distributed, how much may be taxable, whether withholding was taken, and whether penalties might apply for early withdrawals.
1099-S – Real Estate Transactions
Form 1099-S is issued when you sell real estate such as a primary home, rental property, land, or other property. Even if some or all of the gain is excluded, the sale still needs to be reported correctly.
1099-MISC – Still in Use
Although nonemployee compensation now appears on 1099-NEC, the 1099-MISC is still used for items such as rent, royalties, prizes, certain legal payments, and other miscellaneous income.
What To Do If You Receive a 1099
Don’t ignore it, because the IRS already has a copy. If you have questions about how any 1099 form affects your taxes, I’d be happy to help.
This article is intended for general informational purposes and does not constitute tax advice. Please contact us to schedule a complimentary consultation and learn how these updates may affect your specific situation.