In an effort to help make filing taxes easier this year, we are breaking down the various IRS tax forms to help you know if you need them, and how to use them.
IRS form 1099 covers many different kinds of income other than wages, salaries, and tips. Since you don’t have to submit copies of 1099s with your 1040 form when you file on paper, you generally only receive one or two drafts of this form.
While there are nearly two dozen variations on form 1099, the most common ones are 1099-INT, 1099-R, and SSA-1099. Another version you’ll see often is the 1099-MISC, which businesses use for payments that don’t fall under the other 1099 categories.
Why might you need these three main forms?
1099-INT: Interest Income
You’ll receive a 1099-INT from your bank or brokerage (if you have a mutual fund account) if you accrued more than $10 in interest last year on all of your accounts combined. Many banks are now using online 1099-INT forms, so if you’re not sure if you earned more than $10 during the year, check on your bank’s website to see if they have a 1099-INT available for you to download.
If you paid any early withdrawal penalties, such as cashing out a CD early, those penalties will appear on your 1099-INT, and they’re deductible on your 1040 on line 30. No itemizing required!
1099-R: Distributions from Retirement Accounts
If you move any money around in your retirement accounts, it’ll show up on a 1099-R. Some regular activities that trigger 1099-Rs are:
- Rolling over a 401k from an old job
- Moving money from a traditional IRA to a Roth IRA
- Taking an early distribution to buy a house
- Simply withdrawing after retirement
Don’t be alarmed if you get a tax form when you thought you wouldn’t have to pay taxes yet. While box 1 shows the total amount that you moved or had disbursed, box 2a will tell you how much isn’t taxable, and box 2b will tell you how much might be taxable depending on your situation. A good tax preparation software program like TurboTax will help you figure it out easily.
If you elected to have money withheld for federal taxes, box 4 will show how much was withheld, and that will be credited towards your total tax liability. Box 7 will generally have a code that refers to what kind of withdrawal it was, so check the 1099-R form instructions to make sure that that’s what you were expecting. If you don’t think it’s accurate, contact the company that issued it and ask for an explanation, or a revised form.
SSA-1099: Social Security Benefits
Once you’ve reached retirement age and have elected to start receiving your Social Security benefits, you’ll receive an SSA-1099 form each year detailing precisely how much you were sent under Social Security, how much in federal taxes was withheld, and how much you had to repay from last year (if you received more benefits than you were entitled to in a previous year). This form is important because some of these benefits may be taxable if you have income from other sources.
Other 1099 Form Variants
- 1099-A: Acquisition or Abandonment of Secured Property
- 1099-B: Proceeds from Broker and Barter Exchange Transactions
- 1099-C: Cancellation of Debt
- 1099-CAP: Changes in Corporate Control and Capital Structure
- 1099-G: Government Payments
- 1099-H: Health Insurance Advance Payments
- 1099-LTC: Long Term Care Benefits
- 1099-OID: Original Issue Discount
- 1099-PATR: Taxable Distributions Received from Cooperatives
- 1099-Q: Payment from Qualified Education Programs
- 1099-S: Proceeds from Real Estate Transactions
- 1099-SA: Distributions from an HSA, Archer MSA, or Medicare Advantage MSA
- 1042-S: Foreign Person’s U.S. Source Income
- SSA-1042S: Social Security Benefit Statement to Nonresident Aliens
- RRB-1099: Payments by the Railroad Retirement Board
- RRB-1099R: Pension and Annuity Income by the Railroad Retirement Board
- RRB-1042S: Payments by the Railroad Retirement Board to Nonresident Aliens
- W-2G: Certain Gambling Winnings