Understanding Form 1099

This is the season for receiving W-2s and 1099s.  I’ve already posted a series that went box-by-box through Form W-2, and now I’ll post a bit about 1099s.  There are too many variations of Form 1099 to go box-by-box, so instead I’ll talk in general about the different types of 1099s a person could receive.  Settle in, there are lots of different types of 1099s:

  • 1099-A (Acquisition or Abandonment of Secured Property):  You’ll receive this form if a lender repossesses property from you.  If you receive one of these forms, you’ll want to talk to a tax professional about the tax consequences.
  • 1099-B (Proceeds from Broker and Barter Exchange Transactions):  Reports proceeds from sales of stock.
  • 1099-C (Cancellation of Debt):  Reports amounts of debt cancelled by a lender.  For example, if the bank forgives your mortgage, you’ll get a 1099-C.  If the bank foreclosues on your home and repossesses it, you might receive both a 1099-A and a 1099-C.
  • Form 1099-CAP (Changes in Corporate Control and Capital Structure):  I had never heard of this form until I started doing research for this article.  This form is sent when a corporation undergoes a change in control or capital structure and shareholders must recognize a gain from the transaction.
  • Form 1099-DIV (Dividends and Distributions):  Reports the amount of dividends you received during the year.
  • Form 1099-G (Certain Government Payments):  This reports taxable payments made from government programs, such as unemployment benefits.
  • Form 1099-H (Health Coverage Tax Credit):  This form is not commonly seen; it reports advance payments received from a health insurance plan.
  • Form 1099-INT (Interest Income):  Reports interest income received from things such as savings accounts.
  • Form 1099-LTC (Long-Term Care and Accelerated Death Benefits):  Reports benefits received from long-term care insurance policies or accelerated death benefits received from life insurance policies.
  • Form 1099-MISC (Miscellaneous Income):  Probably the most common 1099.  This is the form given to independent contractors, and it’s often issued for other things such as prize winnings or anything else that could be considered “miscellaneous.”
  • Form 1099-OID (Original Issue Discount):  Issued when you purchase a bond for less than its face value.
  • Form 1099-PATR (Taxable Distributions Receved from Cooperatives):  Issued when you receive patronage distributions from a cooperative.
  • Form 1099-Q:  Issued for distributions from qualified educational programs, such as a 529 Plan.
  • Form 1099-R:  Issued for distributions (including rollovers) from retirement plans and IRAs.
  • Form 1099-S (Proceeds from Real Estate Transactions):  Reports the sale of real estate.  Home sales are excluded if the selling price is $250,000 or less ($500,000 for married couples).
  • Form 1099-SA:  Reports distributions from Health Savings Accounts.