General Instructions for Form 1099

By Joseph Nicholson

There are over a dozen different types of Form 1099, each for reporting a different kinds of income. These are forms used by the Internal Revenue Service (IRS) to track individual income that isn't reported on a W-2 as wages, salaries and tips. Contract workers and investors tend to have more income on 1099s than on a W-2, if they receive even wages or a salary at all. The businesses and entities that make these payments have the obligation to prepare and file Form 1099.

Who Must File

The specific instructions for who must file are included on each type of 1099. Generally, any business must file a 1099 if it paid money to an individual during the year. This includes payment for contract services as well as interest, capital gains or dividends. In the case of the latter, the broker is a middleman/nominee who receives the funds on behalf of the account holder, and who bears the responsibility for filing the appropriate Form 1099. A lender must file the form if it acquires property that had been collateralizing a loan or discharge debt.

Where to File

A copy of the 1099 form must be furnished to the individual taxpayer (called the recipient). An additional copy must be filed with the IRS. If the forms are being submitted on paper, they must be separated by form type and prefaced with a Form 1096 cover sheet. The forms can then be mailed to either the Austin, Texas, or Kansas City, Missouri, processing center depending on the location of the filer (see General Instructions in Resources section below). If more than 250 of a single form type are being submitted, the forms must be sent electronically through the Filing Information Returns Electronically System (FIRE System).

When to File

The filer must send the form to the recipient during the month of January, then has through the month of February to get the forms submitted to the IRS, unless submitting electronically, in which case the deadline is March 31. A 30-day extension can be obtained by filing Form 8809 prior to the original deadline. A professional tax preparer who is requesting an extension for more than 50 different filers must submit Form 8809 electronically.

TIN

To complete a Form 1099, you will need the taxpayer's name, address and taxpayer identification number (TIN). For U.S. citizens, this is their social security numbers. Resident and nonresident aliens, however, who are not eligible for social security, will have to acquire an individual tax identification number. The IRS recommends the filer request the taxpayer complete Form W-9, W-9S, or W-8 (if a foreign person) to request his taxpayer identification number. If no TIN is available, leave the space blank.

Types

For more specific information on filing a Form 1099, use the IRS Guide to Information Returns (see Resources) to identify the appropriate form type. For example, if your organization pays grants, this is reported on a Form 1099-G. Payment of fees to a non-employee are reported on 1099-MISC. Use the instructions provided with the form.

About the Author

Joseph Nicholson is an independent analyst whose publishing achievements include a cover feature for "Futures Magazine" and a recurring column in the monthly newsletter of a private mint. He received a Bachelor of Arts in English from the University of Florida and is currently attending law school in San Francisco.