The most frequently asked tax questions related to Form 1099
For Tax Payers
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As a self-employed 1099 income earner, you are responsible for the self-employment tax on top of your regular tax on your net profits. The 2013 SE tax is 15.3%.
You can deduct ordinary and reasonable business expenses against your 1099 income. So you are only taxed on your Net Profit, not your total 1099 income.
There are more than 15 different types of Forms 1099, each for reporting different kinds of income.
These are forms used by the Internal Revenue Service to track individual income that isn't reported on a W-2 as wages.
Contract workers and investors usually have more income on Forms 1099s than on a W-2.
The business and entities that make these payments have the obligation to prepare and file Form 1099.
A 30-day extension can be obtained by filing Form 8809 prior to the original deadline.
A professional tax preparer who is requesting an extension for more than 50 different filers must submit Form 8809 electronically.
The IRS recommends the employer request the taxpayer complete Form W-9, W-9S, or W-8 (if a foreign person) to request his taxpayer identification number.
Gross proceeds of $600 or more paid to an Attorney.
Any recipient with federal or state withholding regardless of amount.
At least $10 paid for Royalties or Broker payments in lieu of dividends or tax-exempt interest
Any fishing boat proceeds.
Generally, payments to corporations (except of Legal Services) are exempt from the filing requirements.
Dept of the Treasury
Kansas City, MO 64999
Report payments made to employees under a Non-accountable plan as wages on Form W-2.
Generally, Payments made to employees under a Accountable plan are not reported as wages on Form W-2.
Attorney's fees of $600 or more paid in the course of your trade or business are reportable in Box 7.
Gross proceeds (such as for a case settlement) paid to Attorneys are reportable in Box 14.