5 Form 1099 Variants That Matter in Business Taxes | MyCountSolutions
We hear about form 1099 at a certain time of the year. To begin with, there isn’t a single form 1099. They are 18 forms in total, pertaining to different entities, individuals, and payment scenarios. Here in this blog post, we are going to discuss the ones that are relevant to small business owners and their accountants that matter in business taxes.
1) Form 1099-DIV
Your business will receive a Form 1099-DIV if it has earned any dividends in the given year. The brokerage firm with which you have made this investment will send one copy of Form 1099-DIV to you and the other to the IRS. Any money coming from capital gains, dividends, and the selling of collectibles go into this form.
2) Form 1099-INT
Form 1099-INT accounts for the income generated as interest on a certificate of deposits, savings accounts, and other financial investments. The form shows the interest income, withdrawal penalties (if any), and foreign paid taxes. The revenue a small business generated through interest is also subjected to tax deductions.
3) Form 1099-B
Form 1099-B is issued when a business makes fortunes through barter transactions. This income is usually subjected to federal income tax. Get an experienced service of accountants and bookkeepers for small businesses on board to understand taxes implications associated with form 1099-B.
4) Form 1099-K
Businesses often receive payments from third parties. All these payments are filed under form 1099-K. In most cases, this type of form 1099 is sent for the verification of payments. So, make sure there are no discrepancies in it. Get the services of any online bookkeeping firm to oversee this.
5) Form 1099-MISC
As the name suggests, this form 1099 entails miscellaneous uses. This is the reason why it is the most used form in the commercial sector. Some of the common payments that form 1099-MISC take care of are:
- The payments your business makes to non-employees and other businesses.
- The payment of big bonuses and lottery wins are also accounted for in this form.
- The payments you make to lawyers and other independent contractors and professionals also go in form 1099-MISC.
These forms play an important role in the taxation of the people and entities you have paid the money. So, make sure they are properly taken care of by any good online bookkeeping and accounting firm. In case of any discrepancy, you can be blamed for colluding in any tax evasion scheme.