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Form 1099-MISC

Everything That You Need to Know About Form 1099-MISC

Filing taxes is far from what is thought of as a fun activity. When you're a freelancer, gig worker or self-employed person, the tax forms seem endless, and it’s downright confusing to keep track of them all. You’ve probably heard at some point of the 1099 forms. These forms report different types of income, and each one has its requirements. What about income that doesn’t fit into any specific 1099 forms, you might be asking? That’s where the 1099-MISC comes in. This little form is used by people who make certain miscellaneous payments to self-employed people and freelancers, to report them to the IRS. Since MISC 1099 is the most common of the 1099 forms, and a copy of every form gets sent to the self-employed payee, there’s a good chance you will receive this tax form in the mail.

Let’s take a quick look at what the 2021 1099-MISC looks like:

Table of contents

What is a 1099 Miscellaneous form and what is a 1099-MISC form used for?...Read more

Who receives Form 1099-MISC?...Read more

Differences between Form 1099-MISC and 1099-NEC...Read more

Latest updates to the 1099-MISC forms...Read more

Filing Form 1099-MISC...Read more

Form 1099-MISC due dates...Read more

What else is on Form 1099-MISC?...Read more

What is a 1099 Miscellaneous form and what is a 1099-MISC form used for?

Let’s be honest. The IRS doesn’t make it easy when it comes to tax filing. There are endless tax forms to keep track of, each with its deadline and instructions. So here’s everything you need to know about the form dedicated to filing miscellaneous income. Form 1099-MISC (MISC meaning Miscellaneous Income, aka your 1099-MISC income) is a tax form issued by the Internal Revenue Service, or IRS, to report certain types of miscellaneous income. You will use this form to report certain types of income, including healthcare payments, payments to attorneys, rent and prize and award payments.

But what about the payment you receive for you work, otherwise known as non-employee compensation? Good question! Before the 2020 tax year, all non-employee compensation, or all the payments you received of any sort as a self-employed person, was reported on the 1099 MISC. That means as a sole proprietor, freelancer, gig worker or self-employed person, you would have reported all your income, of any kind, on the MISC Form. When it comes to taxes and the IRS, things are always changing, and you can never be sure what will happen for the next tax year. For example, one of the newest changes took place in the 2020 tax year. Now, all non-employee compensation is reported on the Form 1099-NEC.

Form 1040

This is the master tax form that every American, freelancer or not, needs to fill out after the tax year ends.

US Tax Forms

The most important tax credits self-employed and freelancers.

Form 1099-MISC

You will use this form to confirm any payments you received outside of your freelance or independent contractor work, like prize money or money for healthcare.

Form 1099

All self-empoyed individuals and freelancers who earn more than $600 during the tax year use this form to report their income to the IRS.

Form 1099-NEC

If you earn an income for your work done as a self-employed individual or freelancer, this form is where you will see that income reported to the IRS.

Form 1099-K

If you received $600 or more in online credit card payments during the tax year, you will need to receive this form in the mail to confirm the payment amounts.

Form 1040

This is the master tax form that every American, freelancer or not, needs to fill out after the tax year ends.

US Tax Forms

The most important tax credits self-employed and freelancers.

Form 1099-MISC

You will use this form to confirm any payments you received outside of your freelance or independent contractor work, like prize money or money for healthcare.

Form 1099

All self-empoyed individuals and freelancers who earn more than $600 during the tax year use this form to report their income to the IRS.

Who receives Form 1099-MISC?

If a business paid you more than $600 in legal settlements, rent payments or prizes and awards, it will need to file form MISC 1099, because these are all payments that are not subject to self-employment taxes.

Differences between Form 1099-MISC and 1099-NEC

Before the 2020 tax year, you would report miscellaneous income, including non-employee compensation, on the IRS 1099-MISC forms. But beginning in 2020, the IRS decided to bring back the 1099-NEC: Nonemployee Compensation form to report non-employee compensation apart from certain other payments. Those other payments are now reported on the 1099-MISC forms. With a better understanding of the purpose of these two forms, let’s now talk about the due dates for each of them. Of course, it would make life easier if the forms had the same due dates, but unfortunately that's not the reality. The due date for IRS form 1099-MISC is March 1, if you file by mail, and March 31 if you file electronically. Form 1099-NEC is due on January 31 of the following tax year.

Latest updates to the 1099-MISC forms

You should receive a Form 1099-MISC from the business hiring you for your services in two cases: if they paid you at least $10 in royalties or broker payments in place of dividends or tax-exempt interest during the tax year, or if you sold $5,000 worth of consumer products not in a permanent retail location. Let’s say your gig is related to fishing. You might receive the 1099-MISC forms if you make any cash purchases of fish or other aquatic life involved in the trade of fishing. 1099-MISC forms might also be sent to you if the business that hired you does not disclose its federal income tax under IRS tax withholding protocols.

If a business directly sells a consumer product for $5,000 or more to you, for you to resell it to any establishment except a permanent retail store, the business will need to report this on the MISC 1099 form.

Filing Form 1099-MISC

There are different copies of the form and let’s take a look at the different types:

Copy 1 gets submitted to your state tax department by your hiring business or firm.
Copy B gets sent to you (yay)! You should receive this from your hiring entity.
Copy 2 is sent to you for your state tax return.

Keep Copy C for your records to help you keep track of the income being reported. With the new revisions to the MISC 1099, there are some changes for reporting income. Here's a sample form that's been filled out.

Form 1099-MISC due dates

The cut-off date for sending a complete 1099-MISC, with payments from the previous tax year, to recipients is January 31 of the current tax year. As a self-employed person or freelancer, you should receive this form from the business or entity that hires you for your services by that date. The deadline for those businesses or entities to file the form’s paper copies is March 1. For electronic filing, the date is March 31. If the date falls on a weekend or holiday, the form can still be sent the following business day.

What else is on Form 1099-MISC?

Apart from reporting the miscellaneous payments a business has made to you, Form 1099-MISC contains personal information such as name, address and Social Security Number or Employer Identification Number. Most notably, this form will categorize each type of payment into different boxes based solely on the payment being reported. After you have received your 1099-MISC and 1099-NEC forms, FlyFin’s Tax calculator lets you easily calculate the amount of tax you owe to the state and the federal government. All you have to do is answer basic questions about yourself and your work to arrive at your tax figure.

Quick tip

The 1099-MISC used to be the default for reporting any self-employment income before 2020. Now, the form shows only special payments like a speaker fee or healthcare that you receive.

What’s FlyFin?

Wondering how to file 1099-MISC easily? FlyFin is the answer. FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. Using a powerful A.I., FlyFin tracks all your business expenses automatically. But anyone can file taxes through FlyFin! Our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. You can download the FlyFin app and have your taxes filed in less than 15 minutes, saving you time and money.

Need help navigating your taxes?

FlyFin's A.I. and 24/7 CPA support will guide you.

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