What it the 1099 Tax Form?
When a person does some work that generates income, there is need to file a report that shows that they received a certain type of income. The government has a tax collection body, the internal revenue service which basically needs this data to ease the process of collecting tax received from individuals. Income that is usually taxed a given amount may include salaries, proceeds from broker and barter exchange transactions among others such as capital gains. Forms to fill out this information are usually given out by the payer. One of the forms used to file for such information is known as a 1099 tax form.
When the time to file tax returns is near, those who made payments have to specifically send two copies of the 1099 tax form to the individual making the filing and also to the internal revenue service. Mainly, reporting of income received is done on a yearly basis. There is need to know that there are many types of 1099 tax forms. This is basically due to the fact that different forms are used in filing for the different types of income.
It is usually advised that in case a person misses receiving a 1099 form from the organization that paid them, there’s need to get a form as it is mandatory that one reports any taxable income on their tax return. Reporting taxable income is mainly done on a step by step process that should be observed. One of the first steps to take is to log in to your account on the online platforms that assist in submitting tax returns. One then chooses the type of form they are interested in, enter the relevant information and save once done.
At times, it may happen that a person was paid a small amount resulting to their payer not sending them the 1099 tax form. It is good to note that income received bring about a difference in the kind of form sent by the payer. In case one does not receive the form yet they should have, they can result in using form 4852 as it serves as a substitute. It is also a wise decision for a person to notify the IRS that they didn’t receive the tax form so that they can be guided on the way forward in filing taxable income received.
Last but not least, once a person receives any kind of payment that is taxable, it is wise that they report it with the revenue collection body, the Internal Revenue Service. This makes it easier for the government to collect tax and at the same time, ease the burden that may fall on you in case the IRS realizes that one hasn’t been filing their returns.