What Is a 1099 Form? Everything You Need to Know
By Tax&Facts | Published on | Read: 3 Mins
If you've done freelance work, earned interest, received dividends, or collected unemployment benefits, there's a good chance you've seen—or will soon see—a Form 1099. This form is a vital part of the U.S. tax system for tracking non-employee income. Whether you're a gig worker or an investor, understanding how the 1099 works can help you stay compliant and avoid penalties.
What Is a 1099 Form?
A 1099 form is a series of IRS documents used to report various types of non-salary income. This income isn't from a traditional employer-employee relationship and usually includes:
- Freelance or contractor earnings
- Bank interest
- Dividends
- Government payments
- Investment income
Each version of the 1099 form corresponds to a different kind of income, and the payer (not you) is required to issue it to both you and the IRS.
Who Issues a 1099?
The organization or person that paid you is responsible for issuing the 1099. This may include:
- Businesses hiring freelancers or contractors
- Banks or credit unions for interest
- Brokerage firms for investments
- State governments for unemployment or tax refunds
- Retirement plan administrators
You do not need to issue the 1099 yourself. Just report the income shown when filing your taxes.
Common Types of 1099 Forms
| Form | Purpose | Example |
|---|---|---|
| 1099-NEC | Nonemployee compensation | Freelancers, contractors earning $600+ |
| 1099-MISC | Miscellaneous income | Rent, royalties, awards |
| 1099-INT | Interest income | Bank or credit union interest |
| 1099-DIV | Dividends and distributions | Stock or mutual fund dividends |
| 1099-B | Broker and barter exchange | Stock sales or crypto transactions |
| 1099-R | Retirement distributions | IRA or pension withdrawals |
| 1099-G | Government payments | Unemployment, state tax refunds |
| 1099-K | Payment platforms | Income from PayPal, Venmo (if $600+) |
When Are 1099s Issued?
Payers must send 1099 forms by January 31 following the tax year. For instance, income earned in 2024 should be reported on a 1099 sent by January 31, 2025.
The IRS also receives a copy—so if you don’t report this income, it could trigger an audit or a tax notice.
What to Do If You Receive a 1099
- Review it for accuracy – Check your name, SSN, and income details.
- Keep a record – Store it with your tax documents.
- Report the income – Use the correct IRS forms (e.g., Schedule C for self-employment).
- Deduct expenses – If self-employed, reduce your taxable income legally.
FAQ Frequently Asked Questions (FAQ)
Q1: What if I didn't receive a 1099?
A1: You’re still required to report the income. Follow up with the payer to
request a copy or review your records to estimate earnings.
Q2: Do payers withhold taxes on 1099 income?
A2: No. You are responsible for paying self-employment tax and income
tax—usually through quarterly estimated payments.
Q3: Can I deduct expenses related to 1099 income?
A3: Yes. If you're self-employed, you can deduct ordinary and necessary
business expenses using Schedule C.
Q4: Is a 1099 the same as a W-2?
A4: No. A W-2 is for employees. A 1099 is for non-employees like
freelancers, contractors, and others earning non-wage income.
Q5: What happens if I ignore a 1099?
A5: The IRS will still receive a copy. Failing to report it can result in
penalties, interest, or an audit.
Article History
v1.0 (May 19, 2025): Initial publication of the article
