Form 1099-Misc

Tax Professionals' Resource
October 19, 2012 — 1,255 views  
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Form 1099-Misc

A Form 1099-Misc is a federal form used to report several different types of income to the Internal Revenue Service. The form is sent to the recipient of the income, so they can report the income at tax time on their income tax return. The deadline for mailing the form to the recipient is January 31st of each year. A copy of the form is also sent to the Internal Revenue Service.

While the Form 1099-Misc is attributed to self-employment income, it is also used to report several other types of income. Self-employment income is reported in box 7 of the form which is labeled as non-employee compensation. If a payer does not consider the recipient an employee, they do not withhold and pay income tax, social security and Medicare tax. It is the responsibility of the payee to claim the reported income on their Schedule C or F and Schedule SE. Box seven would also be used to report the sale of fish if the recipient is in the business of catching and selling fish.

Other income amounts that would be reported on Form 1099-Misc would include income received from real estate rental property. Rental income would be reported in box one on the form. Box two on Form 1099-Misc would be used to report royalties that would be received for such things as mineral, gasoline or oil. If the recipient receives income as a fishing boat operator and is self-employed, this amount would be reported in box five. Medical and health care payments made to the recipient would be reported in box six. If there are substitute payments made instead of dividends, or if tax-exempt interest is received by a broker on behalf of the recipient resulting from a loan on the recipient’s securities these would be reported in box eight. The small box in box nine would be checked if the recipient received $5,000 or more in consumer product sales. If the payee received crop insurance proceeds, that amount would be shown in box ten. Any golden parachute payments made that would be subject to the 20% excise tax would be reported in box thirteen. Amounts paid to an attorney would typically be reported in box fourteen, and any other amounts of miscellaneous income is reported in box three such as prizes and awards. If federal tax is withheld from the reported income, that would be reported in box four.

All identifying information must be entered including payer and payee names, addresses, and tax identification numbers.

 

Tax Professionals' Resource