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What is a 1099-A form?

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What is a 1099-A form?

Buying a house is no small feat, especially in this economy. But sometimes, things can change, and you might find yourself facing foreclosure. If this happens, you’ll be receiving a 1099-A form from your lender. This form is just one of the multiple 1099 forms that the IRS has in circulation. Form 1099-A, also known as the ‘Acquisition or Abandonment of Secured Property’ form, is mainly used when you’ve lost any kind of property to foreclosure. Your mortgage lender (or lending institution) will send you this information form to indicate that your property has been repossessed and sold.You will receive a separate form from each of your lenders if you have multiple mortgages, If you’re a self-employed individual, freelancer, gig worker or independent contractor, this form is pretty different from the other 1099 forms you may know, like the 1099-NEC. But it is still an important form to be aware of if you own any property (personal or business use) because you’ll need it when you file your taxes. Key takeaways:
  • Form 1099-A is sent by lenders if property has been foreclosed and sold
  • The deadline to receive this form is January 31
  • This form will be sent regardless of how you use your real estate property

Table of contents

Who receives a 1099-A form?...Read more

How do I report Form 1099-A?...Read more

Who receives a 1099-A form?

Let's say you bought a house in 2021 with the help of a mortgage loan. As an architect your income fluctuated in 2022 because you were in between jobs and you ended up missing a few payments. Your lender then took ownership of your home and foreclosed it. The lender will then have to fill out a 1099-A stating the home’s market price, the date when it was foreclosed and how much debt is still unpaid. They will then file it with the IRS and send you a copy. As the borrower, you'll need to check this form to see whether you have a recourse or non-recourse loan. If you have a recourse loan, you still need to repay the outstanding debt to your lender. If it’s a non-recourse loan, you don't have to pay. And if your lender forgives the outstanding loan payment, the amount you didn’t pay will be considered taxable. You’ll know this is the case if you also receive Form 1099-C. If you were insolvent when your property was foreclosed, the unpaid amount is not taxable.
Who receives <span style="background: linear-gradient(101.76deg, #19ACA4 1.98%, #3563CD 100.59%);
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Quick tip

If you haven't received a 1099 form on time, don't sweat it. There's no penalty for it, and you can still file your tax returns as long you have all your bank statements and receipts.

How do I report Form 1099-A?

It is important to note that if you're also self-employed, this doesn't affect your self-employment taxes in any way. You'll still have to pay that 15.3% tax based on your income which you can calculate based on the 1099 forms you receive (like 1099-K or 1099-MISC). You can also deduct any industry-relevant business expenses as tax deductions and lower your taxable income even further. A 1099 tax calculator can help you do that easily. Now, if you receive Form 1099-A, you'll need to report that information Schedule D. This is mainly the case for property bought for personal use. You will report the “sales price” of the property along with any capital gains or losses. Subtracting the property sales price from the original purchase price will give you the capital gain or loss. The sales price depends on what type of loan you had. If it is a recourse loan, the sales price will be the lesser of two options: the property's fair market value (FMV) or the outstanding loan amount. If you have a non-recourse loan, you will use the latter.
How do I <span style="background: linear-gradient(101.76deg, #19ACA4 1.98%, #3563CD 100.59%);
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The sales price also depends on the state you live in, so make sure to research your state lending laws. For example, if you're self-employed and living in California, you can use a California tax calculator to get a full breakdown of your federal and state taxes. If you have a capital gain, the IRS lets you exclude this from your taxes if you fulfill two conditions. You have to have lived on the property for at least two of the past five years and your gain was less than $250,000 if you’re filing as a single or $500,000 if filing jointly. This is a tax break called Section 121, and only applies to homes that were used as the primary residence. If you bought property to use for your business or as an investment, you'll need to fill out Form 4797. This can quickly get very complicated, so it's best to seek professional help.
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As an independent contractor or self-employed individual, it can be a challenge to manage and keep track of all your expenses. But FlyFin can help. You can effortlessly link your expenses and allow A.I. to comb through them, highlighting every possible deduction you can take to reduce your tax bills. Plus, with a team of expert CPAs who specialize in 1099 taxes are available round-the-clock on the app to answer your queries and even assist with preparing and filing your tax returns for you.

1099 G form

The 1099-G form is used to report payments made by governments to individuals. Unemployment compensation should be reported on Schedule 1 (Form 1040).

1099 SA form

The 1099-SA form is an informational form that reports distributions from your health plan. This is filed on Form 8889 or Form 8853 and attached to Form 1040.

Form 1040

This is the most common document in the US tax system. It's the master tax return that every American fills out.

Form 1040 Schedule C

Running a business by yourself? This is the tax return 2022 schedule where you report how much (knock on wood) profit you made or how much you (heaven forbid) lost over the course of the year.

Form 1040 Schedule SE

SE stands for self-employment tax, and this is where people who make a living working for themselves or freelancing pay Social Security and Medicare taxes.

Form 8829

If you use your home for work, you can deduct things like utilities and supplies used for your home office or storage space used for inventory from your taxes. Use this form to figure out how much you can deduct.

Form 1099

If you're self-employed, this is the form that the people who pay you use to report those payments to the IRS. Here's what you need to know about it.

Losing a 1099 form

If you've lost a 1099 that was sent to you, fear not. Here's what you can do if it happens.

Form 1099-NEC

Entities that pay you for services as a freelancer or independent contractor report those payments to the IRS using this 1099 form.

Form 1099-MISC

Entities that give you other forms of income as a freelancer or independent contractor, such as prize money or money for healthcare, report those payments to the IRS using this 1099 form.

Avoid 1099-Misc

There are ways to lower the amount of tax you pay as a 1099 self-employed individual. Here are five proven strategies.

Form 1099-K

If you receive payments of $600 or more as a self-employed individual through credit card companies and payment services like PayPal, they report those payments to the IRS using this 1099 form.

Paypal

Here's how to receive a 1099-K from PayPal and how to use it to file and pay your 1099 taxes.

Shopify

Here's how to receive a 1099-K from Shopify and how to use it to file and pay your 1099 taxes.

Venmo

Here's how to receive a 1099-K from Venmo and how to use it to file and pay your 1099 taxes.

Form 1099-MISC VS Form 1099-NEC

Understand what makes these 1099 forms different from each other and what they mean for you as a 1099 freelancer, independent contractor or self-employed individual.

Form 1040-ES

This vital tax form for self-employed individuals and freelancers is how they pay quarterly taxes, which they need to estimate (ES means estimated taxes).

1099 B form

A 1099-B form is an informational return form for recording the sale of investments by brokerages. This is reported on Form 8949 and Schedule D.

1099 G form

The 1099-G form is used to report payments made by governments to individuals. Unemployment compensation should be reported on Schedule 1 (Form 1040).

1099 SA form

The 1099-SA form is an informational form that reports distributions from your health plan. This is filed on Form 8889 or Form 8853 and attached to Form 1040.

Form 1040

This is the most common document in the US tax system. It's the master tax return that every American fills out.

Form 1040 Schedule C

Running a business by yourself? This is the tax return 2022 schedule where you report how much (knock on wood) profit you made or how much you (heaven forbid) lost over the course of the year.

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