A 1099 form is used to report income that does not come from an employer to the IRS. There are more than 20 types of 1099 Forms, and you should be most familiar with the most common:
- 1099-INT: Reports interest income
- 1099-DIV: Reports dividend income
- 1099-G: Reports state and local tax refunds and unemployment benefits
- 1099-R: Reports pensions and payouts from your Individual Retirement Account(s) (IRA)
- 1099-S: Reports income from real estate transactions
The IRS will hold you responsible for paying the taxes on income from these sources even if you don’t receive a 1099 form. Your reported 1099’s (from the issuing institution) are compared to what is disclosed on your tax returns, and if they do not match, the IRS will send a notice of taxes due. Issuing institutions are required to mail your 1099 forms no later than January 31 for the prior year’s reporting. InvestorKeep will send you an alert any time a 1099 form is posted by a financial institution in your name, ensuring you are aware of any and all of them when filing your taxes.
It’s important to note that if you receive a 1099 form, you made money! That’s generally considered a good thing. Make sure your financial professional is aware of all your 1099s (they can also help you find them online if you fail to receive one).