Why Form 1099 is the Most Important Tax Form of All

Form 1099 is the holy grail of tax forms. It’s the form submitted to the IRS by the person who pays you. Nevertheless, it comes in many different variations. The self-employed will have them. The employed will have them. In addition, anyone else you think of will likely have a type of the 1099 IRS form.1099TaxForms

So why is Form 1099 the most important of all?

Income Statement

The 1099 form is essentially a statement of what you earned and who paid it to you. This is how the IRS determines how much tax you will need to pay to the Federal government this year. They tend to scrutinize this form more than most because even a slight slip-up could radically change the amount of tax you pay.

Independent Contractors

Independent contractors must use the Form 1099-MISC to account for any client who hires them and subsequently gives them more than $600 in income. As you can imagine, this demands excellent record keeping because this can get wild and confusing fast.

Stocks and Shares

The form 1099-DIV is for any investments you happen to have. If you receive dividends from various investments throughout the year, this is the form you have to fill out.

Interest also comes under this category, so you must not leave it out.

Conclusion

The form 1099 is the most important because it’s the statement of everything you have earned in the last year. For most people, this will just be the job they happen to have. For others, it will include a range of investments and private projects.

Make sure you get it right the first time!

Image credit: MoneyBlogNewz

Be Sociable, Share!

johnAbout john
Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Huddleston Tax CPAs of Seattle & Bellevue
Certified Public Accountants Focused on Small Business

(800) 376-1785
40 Lake Bellevue Suite 100, Bellevue, WA 98005

Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching, Quickbooks consulting, bookkeeping, payroll and business valuation services for small business. We serve Seattle, Bellevue, Redmond, Tacoma, Everett, Kent, Kirkland, Bothell, Lynnwood, Mill Creek, Shoreline, Kenmore, Lake Forest Park, Mountlake Terrace, Renton, Tukwila, Federal Way, Burien, Seatac, Mercer Island, West Seattle, Auburn, Snohomish and Mukilteo. We have a few meeting locations. Call to meet John Huddleston, J.D., LL.M., CPA, Tawni Berg, CPA, Jennifer Zhou, CPA, Jessica Chisholm, CPA or Chuck McClure, CPA. Member WSCPA.