1099 (Information Return)

Category: tax

The IRS form used to report various types of income other than salary paid to an employee.

Unlike W-2s, 1099s are for independent contractors, freelancers, and investment income. They report payments to the IRS but do not have taxes withheld by the payer. The recipient is responsible for calculating and paying their own self-employment and income taxes.

Common Examples

• Because you were paid as an independent contractor, you received a 1099 form instead of a W-2 for your project consulting work.
• The firm issued a 1099-NEC to report the non-employee compensation paid to our software development partner.