What Is the Difference Between a 1099R and a 1099 Misc?

by A. Elizabeth Freeman

    In addition to the W-2 form you receive from your employer, you might also receive a 1099 form, or an "information return." Many varieties of the form exist, each to report a specific type of income. For example, a 1099-INT form includes the total amount of interest you earned in a bank account during the tax year. Other 1099 forms include the 1099-R and 1099-Misc. It's not necessary to send these forms in with your return, but you must include the amounts listed on them on your return.

    Purpose of 1099-R

    You receive a 1099-R from the company that manages your retirement plan if you withdraw from a 401(k) plan, pension or IRA during the year. Companies need to send you a 1099-R only if you take a distribution of more than $10. The 1099-R reports how much money you withdrew and how much of it was taxable, in boxes 1 and 2a, respectively. Box 7 of the form contains a code that explains the reason you took a distribution from your retirement plan. If you are not age 59 1/2 and do not qualify for an exception, you might have to pay a 10 percent penalty on the withdrawal.

    Purpose of 1099-Misc

    Companies send 1099-Misc forms to people or other companies that earned $600 or more performing a service for them throughout the year. For example, a company will send an independent contractor who received $750 a 1099-Misc instead of a W-2. The 1099-Misc is also used to report prize money or to report royalty payments. The form must be sent out for royalty payments of more than $10. In some cases, the form is used to report payments made to doctors or rental payments.

    Deadlines

    Companies must send 1099-R and 1099-Misc forms both to the individual and to the Internal Revenue Service. Companies need to distribute both forms to individuals by Jan. 31 of the next year. For example, a form from 2012 would need to be sent to the individual by Jan. 31, 2013. Companies have until Feb. 28 of the next year to file the forms with the IRS. There are some exceptions to the rules. If the 1099-Misc is used to report tax-exempt interest and substitute dividends by brokers, the brokerage has until Feb. 15 to send the form. A 1099-Misc form reporting payments made to attorneys needs to be sent to the IRS by Feb. 15.

    Filing Taxes

    If you receive a 1099-R, you need to use form 1040 or form 1040A when you file your tax return. Even if the amount you withdrew from your retirement account is not taxable, you still need to report the distribution on your tax return. Form 1099-Misc requires form 1040. You might also need to complete additional Schedules. If you performed services as an independent contractor, use Schedule C to report business income and Schedule SE for to determine the self-employment tax.

    About the Author

    Based in Pennsylvania, A. Elizabeth Freeman has been writing professionally since 2007, when she started writing theater reviews for OffOffOnline.com and Theater Talk's New Theater Corps blog. Since then, she has written for Phillyist, TheNest, ModernMom and "Rhode Island Home and Design" magazine, among others. Freeman has an Master of Fine Arts in dramaturgy/theater criticism from CUNY/Brooklyn College.

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