Often times, people will get 1099-MISC forms in the mail…and
then feel unsure about what those forms mean or what they’re supposed to do
with them. If this happens to you, don’t worry. Appropriately handling your
1099-MISC form is not difficult.
When you get one of these forms, the first thing that you
should know is that you’ll need to report the related income on your tax
return. You will also be required to pay income tax and self-employment tax on
these funds.
And, if you’re wondering why you’re getting one of these
forms in the first place, it’s simply because you did work for someone as an
independent contractor. Since you’re not a full-time employee of this person or
organization, you get a different form than the standard W-2 that regular
employees get.
1099-MISC Forms for
Businesses
If you own a business and are receiving the form as a
business owner, how you will need to report the income is a bit different and
will vary depending on the type of business you own. For sole proprietors or single-member LLCs, you can report
the income on Schedule C- Profit or Loss from Business.
Partnerships, multiple-member LLCs, and corporations, on the
other hand, will include 1099 income as part of their business income tax
returns.
If your situation or business doesn’t fit neatly into one of
the above categories, then it may be smart to speak with an experienced
accountant about your situation.
