Decoding Your Mailbox: A Guide to the 1099s You Might Receive

As a CPA, I know that tax season can bring a wave of paperwork. One of the most common sources of confusion is the variety of Forms 1099 that might show up in your mailbox. Think of these forms as informational returns; they are a heads-up to both you and the IRS about income you’ve received throughout the year.

Let’s break down the most common types you’re likely to encounter.

Key Takeaways

Form 1099-NEC: This is the most common form for freelancers and independent contractors who earn $600 or more from a client.
Taxable Income: All income reported on 1099 forms is generally considered taxable income and must be reported to the IRS.
Verify Information: Always check your 1099s for accuracy. Contact the payer immediately if there are any errors.
It’s Not Just for Self-Employed: You can also receive 1099s for interest (1099-INT), dividends (1099-DIV), and other miscellaneous payments.

The “Big Three” for the Self-Employed and Gig Workers

If you’re a freelancer, independent contractor, or have a side hustle, these are the forms you need to know.

Form 1099-NEC (Nonemployee Compensation)

This is the big one for most self-employed individuals. If you provided services to a business and were paid $600 or more, you should receive a 1099-NEC from them. This includes work like consulting, graphic design, freelance writing, or any other service performed as an independent contractor.

Form 1099-MISC (Miscellaneous Information)

Before 2020, this form was used for contractor payments. Now, it’s used for other specific types of income, such as rents, prizes, and awards. For example, if you rent out a property, you might receive a 1099-MISC from the renter.

Form 1099-K (Payment Card and Third-Party Network Transactions)

This form has become increasingly common in the age of the digital economy. If you accept payments through services like PayPal, Stripe, Square, or sell products on platforms like Etsy or Amazon, you may receive a 1099-K. It reports the gross amount of transactions processed for you by that third-party network.

Other Common 1099s to Be Aware Of

Your income story might include other chapters. Here are a few other 1099s you might see:

1099-INT: Reports interest income you earned from bank accounts, savings bonds, or other investments.
1099-DIV: Details dividend and distribution income from stocks and mutual funds.
1099-G: Reports certain payments from the government, such as unemployment benefits or a state tax refund from the prior year.
1099-B: You’ll receive this if you sold stocks, bonds, or other securities through a broker. It reports the proceeds from the sale, which you’ll need to calculate capital gains or losses.

1099-R: This form reports withdrawals from retirement plans like a 401(k) or a traditional IRA. The distributions reported here are often taxable.
1099-C: If a lender cancels or forgives a debt of $600 or more, you may receive this form. The forgiven amount is often considered taxable income.
1099-S: You’ll see this form if you’ve sold real estate, such as a primary home, vacation property, or land

What to Do When You Receive a 1099

When a 1099 arrives, don’t just file it away. Take these three simple steps :

Verify the Information: Check that your name, address, taxpayer identification number, and the payment amount are all correct. If you find an error, contact the payer immediately to have it corrected.
Keep it for Your Records: This form is a crucial piece of your tax puzzle. All this income needs to be reported on your tax return.
Send to Your CPA: Providing this form to your accountant ensures all income is properly reported on your Schedule C or other relevant forms.

Understanding these forms is the first step toward a smoother tax season. They provide a roadmap of the income you need to report.

In our next post, we’ll flip the script and discuss when you, as a business owner, are required to issue these forms to others.

Frequently Asked Questions about 1099s

What if I received a 1099 for less than $600?

While the payer isn’t required to send one for payments under $600, you are still legally required to report all income, regardless of whether you received a form for it.

I think a 1099 I received is incorrect. What should I do?

You should immediately contact the payer who issued the form and request a corrected 1099. Do not file your taxes with incorrect information.

Do I need to attach my 1099s to my tax return?

No, you do not need to physically attach the 1099 forms to your tax return. However, you must use the information on them to report your income accurately and keep them for your records.

Disclaimer: This blog post is intended for informational purposes only and should not be considered financial or tax advice. The information provided is current as of July 2025, but tax laws are subject to change. Please consult with a qualified professional before making any financial decisions.