2007-01-17 09:19:03 · 6 answers · asked by Marshall G 1 in Business & Finance ➔ Taxes ➔ United States
It's like a W-2. Companies send them to workers or companies that they consider sub-contractors.
Companies don't withhold taxes from a 1099 employee, so if you only got a 1099 make sure that you have any self-employment expenses ready to write-off.
Also, if you had any interest on a bank account, they send you a 1099-INT, or any gambling winnings (on which you can write off your losses up to the amount of your winnings), as well as some other types.
2007-01-17 09:34:35 · answer #1 · answered by Smart1 3 · 0⤊ 0⤋
A 1099 is issued to people that a company has paid more that $600 to and that Company is writing off the expense. When you receive this 1099, it is showing you how much your "Business" was paid, for that year. Now remember that it takes money to make money, so what did it cost you to make that income. Income minus expenses equals your net pay, and this is what you will be required to pay Federal, State and Social Security taxes on.
2007-01-17 17:32:46 · answer #2 · answered by paradise 4 · 1⤊ 0⤋
A 1099 form is an income reporting form. It is used along with W2s to complete a 1040 form with all pertinent information regarding income. Whether it is a 1099M (miscellaneous) or a 1099G (gambling) or other 1099, it will need to be reported.
Speak with an income tax specialist or consult the source below for further information:
2007-01-17 17:30:45 · answer #3 · answered by sheila_0123 5 · 1⤊ 0⤋
It's like a W-2. You have to report the income on your tax return minus any expenses incurred by you to earn this income. You will pay taxes on the net income. Employees get W-2's, subcontractors get 1099's if they made at least $600 from any one company or individual. You need to file Schedule C.
Why not buy Turbotax, it will walk you thru this., or any other tax software program.
2007-01-17 18:09:24 · answer #4 · answered by americanmalearlington 4 · 0⤊ 0⤋
It shows income that the IRS knows you have made (they get a copy of the 1099 as well). If you don't report it on your tax return, they will issue you a notice adding it to your income and they will figure out the tax you owe on it, plus interest and penalties.
2007-01-17 17:25:24 · answer #5 · answered by jseah114 6 · 1⤊ 0⤋
The impact from the IRS will be greater than that of Mac truck going at 80 mph if you do not report the income.
2007-01-17 17:30:12 · answer #6 · answered by drdos43 2 · 0⤊ 0⤋