The 1099 Form is what you need to fill out, file, and give to a person who did work for you but who is not a regular employee. Independent contractors and freelancers may require a 1099 MISC form or a 1099 NEC form. But, there are other 1099 forms. And the new 2021 1099 form will have changes from 2020.
The 1099 A form is for reporting canceled debt, which the IRS considers to be income. You will get one of these from your mortgage lender if they canceled all or part of your mortgage. This also occurs if you had a short sale of your home.
This form covers income from selling various types of securities and from bartering on bartering exchanges. Such income is taxable.
This form is for forgiven debt from a credit card issuer. You may have settled your credit card debt for less than what you had owed. Unfortunately, the credit card issuer will generate this form and the amount of forgiven debt is taxable.
This form is used to report income in the form of stock, cash or property that came about because a corporation in which you held shares was acquired or had a huge change in its capital structure. This realized income is taxable.
This is the form for reporting dividend income throughout the year. It does not include credit union dividends which are reportable as interest on the 1099 INT Form.
This is the form for reporting tax refunds, credits, or offsets from your previous federal, state, or local government tax returns. It also is for reporting unemployment benefits during the year.
Interest from bank accounts, brokerages, or other financial institutions is reportable as income. If you earned more than $10 in interest during the year from any such institution you will receive one of these.
This form should now be used instead of 1099 MISC for reporting independent contractor payments.
There are several changes in the 1099 forms for 2021 over 2020.
First of all the IRS changed the title of this form from “Miscellaneous Income” to “Miscellaneous Information.”
Other changes include Box 11 which now includes any reporting under section 6050R to include cash payments for buying fish for resale from a person or corporation who catches the fish. Box 11 will have instructions for this.
Box 1 will no longer be used to report items under section 6050 in regard to buying in order to resell them.
Box 2 can be used for reporting sales of $5,000 or more of consumer products for resale when done on a deposit-commission basis, a buy-sell basis, or any other basis. This information can also be reported on 1099 MISC. The box will include instructions.
The form has also been shortened so that three forms can fit on a page.
For help sorting out the changes to the new 1099 form for 2021, contact us at Exigo Business Solutions in the Kansas City area.