Types of 1099 Form: What you Need to Know about Tax Filings

Types of 1099

Last Updated October 24, 2022

The most important documents in the business terms are contracts, agreements, and tax forms. New startups find it hard to keep up with different types of 1099 Form required for tax filing returns. When it’s time to report about the earned income that was not a part of the salaries, wages, or tips from the employer, you will need Form 1099. 

Different types of 1099 Form exist, which makes it hard to use the right type of form when needed. Each variant of the 1099 Form represents a different type of income. By February 1, you will start to receive Form 1099.  

Each variant of 1099 must include taxpayer ID numbers for the business or the person receiving it.

But which types of 1099 variants are to be sent by February 1? And which can be sent later? 

In this article, we will cover all types of 1099 Form variants that you need to know about for tax filing purposes. 

 

Different Types of 1099 Form Every Employer Must Know About 

Businesses are required to send 1099 Forms by January 31. There are nearly two dozen types of 1099 variants required according to the situation. 

Down below is the list you might get a hand on, and learn how to report it. 

 

  1. 1099-A: Acquisition or Abandonment of Secured Property

A property used as collateral for a loan or a lender acquires the property afterward, in such a situation you receive a 1099-A Form. 

For instance, a foreclosure on a home is one of the most common cases where a person receives this 1099 Form variant. But a lender is planning to send two versions, i.e Form 1099-A and Form 1099-C. In this case, you will receive the latter one. 

You can expect the form by January 31. 

You will need to use Form 1099-A to report capital gain. 

 

  1. 1099-B: Proceeds From Broker and Barter Exchange Transactions

An income that involves stocks, securities, real estate, or any similar investment (including cryptocurrencies) will require a Form 1099-B. 

This form variant also is required to file capital gains tax. For this purpose, you will need to complete Schedule D and fill the Form 8949 for tax returns. 

Form 1099-B is one of the common forms that are a must for consolidated 1099 Form variants. All the consolidated forms are to be received by the same deadline. 

 

  1. 1099-C: Cancellation of Debt

If you have a debt of $600 during the financial year, the 1099-C Form will be sent to you by January 31.

In case the debt is canceled by the bank, Federal Deposit Insurance Corporation, or credit union, or any lending institution you will receive the form 1099-C. All the related information is reported on Form 982. 

 

  1. 1099-CAP: Changes in Corporate Control and Capital Structure

Shareholders who receive a minimum of $1000 with cash, stock or property can expect to get the Form 1099-CAP. 

Under the circumstances, If any acquisition of control is changed or the capital structure of a company is revised, you will receive this 1099 Form variant.  Corporations have to file a report that mentions the substantial change in the capital structure. 

You can expect to receive a copy by January 31. 

 

  1. 1099-DIV: Dividends and Distributions

Form 1099-DIV is sent to the shareholders who receive a $10 capital gain or $600 once a company is liquidated. Selling all assets once owned by the company is the primary example of liquidation. 

The information on 1099-DIV is reported on Form 1040 – line 3. However some investments are exempt like money purchase, pension plans or profit-sharing plans, etc. if the dividends are greater than $10, shareholders or investors will not receive the Form 1099-DIV. 

 

  1. 1099-G: Certain Government Payments

An unemployment compensation or a tax refund received from State or local governments, agricultural payments or taxable grants are $10 or more need to be reported to 1099-G. 

This form is crucial because unemployment insurance is also taxable. You should receive the form by January 31 and it be forwarded by the government agency. 

During a pandemic, anyone who received unemployment benefits is eligible to receive the 1099-G. 

 

  1. 1099-H: Health Coverage Tax Credit (HCTC) Advance Payments

The health insurance provider sends the 1099-H in case you had premium health insurance paid in advance. 

Similar to other forms, expect to receive the form by January 31. To complete Form 8885 you will need to use Form 1099-H. Here you will report the premium payments received during the financial year. 

 

  1. 1099-INT: Interest Income

The income earned as interest is mentioned in Form 1099-INT. Interest earned from savings, and checking accounts are receipts of the form. In case you paid a foreign income tax you may also need to report it on Form 1099-INT. 

A copy is expected by January 31 but you may not get the form if the interest income is less than $10. The information is reported on Form 1040 – line 2. 

 

  1. 1099-K: Merchant Card and Third-Party Network Payments

Money made through credit and debit card payments is mentioned on 1099-K. The amount received either as credit, debit, or from any other card transaction is one of the common situations. Another common situation is you have 200 transactions or a minimum income of $20,000 via third-party payment platforms. 

Include your income and the gross receipts on your federal income tax return. You may also need to report on Schedule (depending on the type of business you have), Schedule E if it’s a partnership, or Schedule F if it’s a farming income. 

 

  1. 1099-LTC: Long-Term Care and Accelerated Death Benefits

When an individual receives a long-term care insurance payment, the insurance company will send 1099-LTC. 

Also, in case of any accelerated death benefits, you will receive the 1099 Form variant. You will need to report it on Form 8853. Generally, 1099-LTC is not a taxable income but insurance companies are to provide claimants with 1099-LTC. So it does not necessarily mean that your income will be taxable. 

 

  1. 1099-MISC: Miscellaneous Income

When an individual has untaxed income (not from the employer) they receive a 1099-MISC. Freelancers and independent contractors are eligible for this form variant. 

Usually, you will not report on Schedule C (for self-employment income). Some of the common receipts of 1099-MISC are; 

    • If someone makes $600 or more from rent. 
    • If someone makes $60 or more from prizes or awards. 
    • If someone receives $10 or more from royalty payments. 
    • A broker pays $10 or more in substitute for dividends etc. 

 

  1. 1099-OID: Original Issue Discount

A bond purchased at below-par value will direct the Form 1099-OID to the buyer. The original issue discount is the difference between the paid amount and the face value of the bond. 

If the OID was a minimum of $10 you can expect to receive the Form 1099-OID by January 31. If the value was less than $10 you may not receive a copy of the form,

The very form also can be used for reporting a withdrawal penalty for the bond or time deposit. You will need to report OID on your tax return alongside other interests earned for the financial year. 

 

  1. 1099-PATR: Taxable Distributions Received From Cooperatives

Farmers working as a part of a cooperative business are eligible for Form 1099-PATR. Even if it’s for selling crops to a corporation. If you had distribution payments of at least $10 for domestic production activities deduction will also receive the form. 

The cooperative’s members keep a copy for tax credit purposes. Report the income information as “other income” on Form 1040 – line 8. 

 

  1. 1099-Q: Payments From Qualified Education Programs (Under Sections 529 and 530)

You must submit Form 1099-Q (Info Copy Only) if you:

    • are in charge of a state- or approved educational institution-established program as an officer, employee, or the designee of an official or employee.
    • distributed money from a recognised tuition scheme (QTP).

If someone makes a contribution to a Coverdell Education Savings Account (Coverdell ESA) or a 529 plan and names you as the beneficiary, you’ll receive an IRS Form 1099-Q.

  1. 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

Income received from the retirement account is commonly represented in Form 1099-R. A copy is received by January 31 from the custodian. The least amount of $10 if withdrawn from any of the following accounts makes you eligible for the 1099 Form variant. 

    • Traditional IRAs or Roth IRAs 
    • A 401(k0 or Roth 401(k)
    • Pension 
    • Annuity 
    • Insurance contract etc. 

 

  1. 1099-S: Proceeds From Real Estate Transactions

A sale made of at least $600 on an exchange of real estate makes you recipient for 1099-S. 

For instance, timber royalties earned for pay-as-cut are also included in this form variant. Depending on the type of transaction, the issuer may vary. It can be a mortgage lender or a real estate broker or a mediator responsible for closing a transaction. 

 

Bottom Line 

It’s important for a taxpayer to learn about different types of form 1099 involved in their business. Since each form represents multiple situations, you can get confused sometimes – which is understandable. 

Instead of juggling with the forms and keeping up tabs on the tax season, it’s a smart strategy to hire a remote CPA to do the job for you. Contact My Count Solutions for an experienced tax consultant or a CPA that understands your line of business.

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Tags: Business Tax, Form 1099, IRS 1099 Form, Tax, Types of 1099 Form