Monthly Archives: November 2020

What Small Businesses Need to Know About IRS Form 1099

A 1099 form is a tax form that Agen togel businesses use to report certain types of non-employee compensation – such as payment for professional services, royalties, interest, and awards or prizes – paid to other businesses and to individuals who aren’t full-time employees of your company.

Businesses submit Form 1099 both to payees and directly to the IRS. However, the form only reports business-related compensation for intangibles like interest or services to other companies and people who are not your company’s W-2 employees. It is not used to report payments for purchases like inventory or office supplies.

Types of 1099
When most people think of 1099s, what comes to mind is Form 1099-MISC – the form used to report miscellaneous payments for freelance and other contracted services provided to companies that don’t employ the workers full time. But there are many types of 1099, each reporting different types of payment.

Here are five of the most common types of 1099:

1099-MISC: Businesses file this form for each individual they have paid during the year for miscellaneous services.
1099-INT: Financial institutions file this form to report the interest they paid account holders.
1099-DIV: Financial institutions file this form to report dividend payments and investment distributions.
1099-LTC: Insurance companies and government agencies file this form to report long-term care and accelerated death benefits paid out on life insurance policies.
1099-SA: Health insurance administrators file this form to report distributions from health savings accounts, Archer medical savings accounts or Medicare Advantage medical savings accounts.
The types of 1099s you complete (or receive, in the case of a payee) depend on the type of organization you have and the type of compensation you issue or receive throughout the year.