Tax Form 1099-MISC is commonly used among self-employed professionals to report profits from services performed for other organizations. If you are a sole-proprietor and were paid more than $600 for services during a given tax year, the business you worked for is required to send Tax Form 1099-MISC.
There are many details of Tax Form 1099-MISC that you need to be aware of. Upon receiving this tax form, you should immediately review the box for “non-employment compensation.” This is the actual amount of money that you earned by working for the company. It is your responsibility to report this income on your tax return. The IRS receives the same form, so they will know if you failed to report this income.
Generally speaking, Tax Form 1099-MISC is very similar to Tax Form W-2. The only difference is that a 1099-MISC is for sole-proprietors while a W-2 is for employees.
IRS Tax Form 1099-MISC (Miscellaneous Income)
What if I don’t receive Tax Form 1099-MISC for a company that paid me more than $600? Contrary to popular belief, this does not mean that you are allowed to leave this income off your tax return. The same holds true if you earned less than $600. You still have to report this income, even though the company you worked for is not required to provide you with Tax Form 1099-MISC.
If you receive Tax Form 1099-MISC and realize that the income reported is incorrect, it is important that you immediately contact the issuing business so that they can send both you and the IRS an updated form. Make sure you wait for a corrected 1099-MISC before you file your income tax return.
It is not uncommon to receive your Tax Form 1099-MISC after you file your taxes. In this case, you do not have to do anything as long as you reported the income on your Schedule C. Of course, if you did not report the income you will need to send an amended return including the information from the newly received 1099-MISC.
There are two types of people who deal with Tax Form 1099-MISC: those who work as a sole-proprietor and those who hire these people.
Don’t make Tax Form 1099-MISC more complicated than it has to be. This is a common tax form used by sole-proprietors and businesses all over the country.