The information in this article is up to date for tax year 2022 (returns filed in 2023).
There are over a dozen types of 1099s used to report a variety of income types, payments, etc. This article will discuss Form 1099-MISC specifically.
Prior to tax year 2020, Form 1099-MISC was used to report non-employee compensation. Since then, its function has changed. Keep reading to learn what’s new and how these adjustments affect your taxes.
What is Form 1099-MISC?
Form 1099-MISC is primarily used to report miscellaneous payments that aren’t subject to self-employment tax. Examples of such payments include rent, royalties, prizes and awards, substitute payments in lieu of dividends, or other payments that don’t count as non-employee compensation.
How to File Taxes with Form 1099-MISC
At the start of the new year, you’ll typically receive Form 1099-MISC if you had more than $600 worth of miscellaneous income within the last year. You’ll use this form to report any earnings that didn’t come from your primary employer, or earnings that don’t qualify as self-employed income.
What is the difference between Form 1099-MISC and 1099-NEC?
Prior to tax year 2020, the 1099-MISC was primarily used to report non-employee compensation. Now, the form’s purpose corresponds with its name, and is used to report miscellaneous income.
For example, freelancers filing taxes will use the 1099-NEC to report their self-employed income. However, if they’ve earned royalties for their work, won a prize, or have rental income of any kind, they would use form 1099-MISC to report those specific earnings in addition to the NEC.
To learn more about Form 1099-NEC, read What is Form 1099-NEC?
Who receives a 1099-MISC?
You would receive a Form 1099-MISC if you received $600 or more in miscellaneous income in the last year. Say you won the lottery last year – you would get a 1099-MISC from the state where you won in order to report those earnings.
When do 1099-MISCs arrive?
The company or entity from which you received payment is required to mail a 1099 to you no later than January 31 of the year after you received payment from them. For example, if they paid you in 2022, they would need to mail you the form by January 31, 2023.
What if I don’t receive a 1099-MISC?
If you were involved in business dealings through which you received $600 or more of miscellaneous income, you should receive a 1099-MISC. However, if you don’t receive one by January 31, there are a few things you can do.
Self-report your income
If you don’t receive a 1099-MISC, you can always self-report your income. That means you’d have to refer to your own records to report your total miscellaneous income for the year.
If you are a self-employed worker, it is strongly recommended that you keep accurate receipts and records of each contract job. This will help when it comes time to take specific business deductions to reduce tax liability. It’s also important to keep track of your expenses as well as your income.
Do you need help keeping track of business-related receipts? Find out the best way to organize them here.
Ask the payer for the form
If you want to double-check your records, you can reach out to your contractor and ask them for your 1099. They may still be able to send it to you. Your note also could be a helpful reminder for other people who worked for them.
Make sure your address is updated
If you’ve recently moved, make sure you update your address. Any form sent to you also goes to the IRS (it’s tracked via your Social Security Number (SSN)), so you might owe taxes, even if you didn’t receive a 1099.
If your 1099 gets lost and you come across it too late, you can always file for an extension or make an amendment to your tax return. Keep tabs on the IRS website for the latest updates on deadlines.
When do I need to file my 1099-MISC?
Generally speaking, you need to file by Tax Day – April 18. This year, Tax Day doesn’t fall on a weekend, but if it does in the future, your return will be due the next business day.
If you can’t complete your return by this date, you still have to pay your taxes, but you can request an extension to file. If you do, your deadline will be pushed back to mid-October.
Get all the important tax deadlines for 2023 here.
What if I receive a W-2 and a 1099-MISC?
If you receive both a W-2 and a 1099-MISC, TaxSlayer makes it simple and easy to file both forms on one return. Your employer will have withheld income from your paychecks for federal income tax and FICA, but you will still need to pay the taxes on your 1099 income.
For more information about this, read How to File Taxes with a W-2 and a 1099.
What forms will I need to file after importing my 1099-MISC?
If you receive a 1099, you might be required to file a Schedule C and a Schedule SE depending on your work situation.
If you are a business owner or have a profession for which you are the sole proprietor, you may need to file a Schedule C. This form is used to report profits and losses from your business from the prior year.
The good news is that part two of this schedule allows you to take several business deductions, like vehicle expenses, advertising materials, home office expenses, meals, and travel. These can help to reduce your tax bill.
Depending on your employment situation, you may need to file a Schedule SE to calculate what you owe for the self-employment tax. Use your net profit from the Schedule C form to determine how much you need to pay.
What happens if I already filed taxes and received a 1099-MISC in the mail?
If your 1099-MISC says you’ve earned less than $600, you don’t need to act. However, if you’ve earned more than $600, you are required to file your 1099-MISC and should amend your tax return to report it.
Should I pay quarterly estimated payments?
If you are considered self-employed, the IRS strongly recommends making quarterly estimated tax payments.
If you owe more than $1,000, the IRS will fine you for underpayment of taxes. But if you make tax payments throughout the year, you’ll avoid the fine, and you won’t owe a large lump sum at tax time. Use Form 1040-ES to calculate how much each of these payments should be.
TaxSlayer Self-Employed helps you prepare and file tax forms for your business, like 1099s and Schedule C. We also provide built-in payment reminders and support for all your tax questions. Get started today!