Form 1099-MISC Miscellaneous Income

1099-MISC form

Form 1099-MISC is an IRS tax Form that is used by US citizens to report their miscellaneous income that includes prices and awards, healthcare spending, rents, payments to an attorney, etc. Before the year 2020, this Form was used to report non-employee compensation to freelancers and independent contractors as well, but now these are being reported in a separate tax Form 1099- NEC. 

Who should file Form 1099- MISC?

Form 1099-MISC should be completed and sent by a taxpayer if they have received $10 or more as royalties and $600 or more as other miscellaneous income during the tax year. The common types of miscellaneous income that are reported in this tax Form are as follows.

  • Rents are paid to property owners and these are generally reported by property managers and real estate agents.
  • Prizes and rewards received by individuals
  • Payments made to a medical facility in the course of a trade or a business.
  • Crop insurance proceeds
  • Cash payments made for fish and other aquatic products      
  • Cash paid in contracts
  • Payments made to an attorney
  • Fishing boat proceeds. 

Filing Form 1099- MISC

While filing Form 1099- MISC the payer will include their name, address, TIN, the recipient’s name, address, and SSN. The revised 1099-MISC also has different boxes for reporting different payments.

Box 1: reporting rents

Box 2: Reporting royalties

Box 3: Other Income

Box 4: Federal income tax withheld

Box 5: Fishing boat proceeds

Box 6: health care and medical payments

Box 7: direct sales of consumer products of more than $5000 value to recipients for resale

Box 8: substitute payments in place of interest and dividends

Box 9: crop insurance proceeds

Box 10: Gross proceeds paid to the attorney

Box 11: payments towards fish purchases

Box 12: Payments towards Section 409A deferrals

Box 13: Excess golden parachute payments

Box 14: Non-qualified deferred compensation.

Box 15: State tax withheld

Box 16: payer’s state number

Box 17: state income.

Due dates for Form 1099- MISC

The payer should send Form 1099-MISC to the recipient by February 1st of the tax year. The recipient should file it with the IRS by March 1st if they are mailing the Form, or by March 31st, if they are e-filing it. The recipient can also attach this Form to their tax returns.

Taxpayers can download this form from the IRS website and Copy A of the Form appears in Red. This is not intended for printing and is meant for IRS use only. The black portion of the Form should be filled and printed. Copy 1 of this Form should go to the state tax department of the recipient. Copy B of the Form should be sent to the tax recipient. Copy 2 of this tax form is sent to the recipient for them to file with their state tax return and Copy C should be retained with the payer for their records. 

Simply receiving the 1099- MISC Form doesn’t entitle the person to pay taxes with the IRS. The taxpayer could have deductions that offset the income tax. It is mandatory to file the Form within the deadline, to avoid late fines and penalties, and the best way to file them without errors and within the deadline is to file them through Tax2efile