A Closer Look at the 1099 Tax Form

Many WAHMs work as Independent Contractors for other companies, meaning that at the end of the year, they will get a 1099 tax form. This tax form is not much different than a W2, and is very important to being able to accurately file business taxes. Since self employed individuals are among those who get audited the most, it is imperative to understand the 1099 form and how it fits into filing the income tax return.

The Purpose of the 1099 Tax Form

The 1099 MISC form notes income received just like a W-2, however it does not contain any information on the withholding because the companies do not withhold any taxes for the people who receive these forms. This is the most commonly used 1099 form and is often provided to independent contractors. The 1099 INT form notes income from interest and dividends. This form will come if you have investments in the stock market, and will come from banks. Independent contractors will not receive this kind of 1099 form. The 1099 G form notes any refund you may have received from the government. Most people will not receive these forms and should not worry about waiting to get one.

What if You Don't Receive a 1099 and You Should?

If you don't receive a 1099 form you know you should receive, contact the person who is supposed to send it to see what is going on. It is okay to file your taxes without the form on hand, so long as you have included the income from the form on your return. If your records are as good as they should be, you will know all the income you made, regardless of whether or not you are sent a 1099. Some companies will not send them to you if you earned below a certain amount, but it is still your responsibility to report all income you earned to avoid potential issues later on if you were to get audited by the IRS.The IRS receives a copy of all 1099 forms you get, so as to be able to keep up with all the income from freelancers and other self employed individuals. The difference is that it is up to the individual to make his or her own quarterly tax payments and save accordingly for the self employment tax which covers medicare and social security for those who do not pay it throughout the yet through employer withholding.