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

If you receive a 1099 in the mail at tax time, it can mean a variety of things. The 1099-R has a completely different purpose from the 1099-MISC. The 1099-R refers to retirement income, while the 1099-MISC is for independent contractors and freelancers who perform a service for someone during the tax year. These are only two of the many varieties of the form that 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 Form 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 must send you a 1099-R 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 Form 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.

Form and Filing Deadlines

Companies must send 1099-R and 1099-Misc forms both to the individual and to the Internal Revenue Service. Companies must distribute both forms to individuals by Jan. 31 of the next year. For example, a form from 2017 must be sent to the individual by Jan. 31, 2018. Companies generally have until the end of February 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 must be sent to the IRS by Feb. 15.

Filing Taxes

If you receive a 1099-R, you must 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 must still to report the distribution on your tax return. Form 1099-Misc requires form 1040. You might also have 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, Emily Weller has been writing professionally since 2007, when she began writing theater reviews Off-Off Broadway productions. Since then, she has written for TheNest, ModernMom and Rhode Island Home and Design magazine, among others. Weller attended CUNY/Brooklyn college and Temple University.


Zacks Investment Research

is an A+ Rated BBB

Accredited Business.