What is a 1099 Form
Are you confused by all those taxation forms you have been getting? Are you paying a tax consultant to fill out your forms for you? Then you are in an opportunity to save on some money and get clear about tax form 1099. Tax form 1099 is a documental instrument that is used by the government to gather knowledge about various incomes which are not included in wages and salaries basically to count in the various contractual and incomes made as a non-employee of a firm. Such forms are generally given out to freelancers, contractors, actors, and book writers etc. who work with an organization for a particular job. There are various types of 1099 forms depending upon the type of information that has to be fetched by the same; 1099A refers to the income from Abandonment of a secured property, 1099B refers to the sale of all those instruments that have a broker involved in it like mutual funds, bonds, securities etc.
1099 Med refers to any kind of remuneration distributed towards the Medical savings of the employees. 1099Div refers to the payments of Dividends to the shareholders and the 1099G refers to any kind of payments made to the government. Basically 1099 form is for those whose incomes are beyond the normal salaries they make, as a huge chunk of a lot of people’s earning comes from rentals they receive, the contractual jobs that they do for other organizations. Returns can also be filed for the same kind of incomes if the tax has been deducted already by the employers.
Three copies of the 1099 form are mandatorily to be filled; one for the payer himself, one for the payee and one for the government. The deadline of filing the 1099 form is generally 31st of January for the same financial year. The various informational details that need to be filled in the form 1099 are the type of transaction done, nature of transaction in terms of profit or loss, the jurisdiction in which the sale was made, the name of the two parties i.e. the payer and the payee etc. Form 1099 is one of the many documental instruments made by the IRS for the general public to gather tax related information for the convenient categorization of the tax information. So next time when you see form 1099 at your desk, don’t worry at all because it is for your own convenience and ease and also for your profits too.