| Form 1099-MISC is one of the most commonly used | | | | $600 from that source in no way exempts you from |
| tax forms for the self-employed and is primarily used | | | | paying taxes on the income. |
| by sole-proprietors to report profits from services | | | | If the amount of income reported on the form |
| performed for other businesses. If you are a | | | | 1099-MISC is incorrect, you must contact the issuing |
| sole-proprietor who performed services for another | | | | business and they must send a corrected form |
| business and you were paid $600 or more for those | | | | 1099-MISC to you and the IRS. Under these |
| services, that business is required to send you an IRS | | | | circumstances, you should wait until you receive the |
| form 1099-MISC. | | | | corrected form 1099-MISC before filing your income |
| When you receive the 1099-MISC, review box number | | | | tax return. In the event that your Schedule C total and |
| 7, "non-employment compensation." This is where your | | | | the tally of all of your 1099s do not match, the IRS will |
| income from that business should be recorded. You | | | | contact you and require an explanation. |
| must be certain to report this income on your Schedule | | | | If you receive a 1099-MISC form after you have filed |
| C because the IRS has also received a copy of this | | | | your income tax, you do not have to do anything if you |
| form. In this respect, the form 1099-MISC serves the | | | | reported the income as part of your Schedule C |
| same function as a form W-2, in that it reports your | | | | earnings. If you did not report the income, you will need |
| income from this source to the IRS. | | | | to send an amended return and include the 1099-MISC |
| Even if you do not receive a form 1099-MISC, you are | | | | and the income it states. This will likely result in you |
| required to report the income when you file your tax | | | | owing higher taxes, possibly with interest and penalties |
| return. | | | | if the amended return is received by the IRS after April |
| If you earned less than $600 in a tax year from an | | | | 15. |
| income source, you must still report the income. Less | | | | Remember to keep accurate records of everything |
| than a $600 income simply means that the business | | | | you earn in the course of the year and report all of |
| you did the work for does not, necessarily, have to | | | | these earnings to the IRS at the time that you file your |
| provide you with the 1099-MISC, but you must still | | | | return, whether you have received all the necessary |
| report the earnings. Because you earned less than | | | | forms from other sources or not. |