Companies are required to report certain information to investors and independent contractors, as well as to the Internal Revenue Service. In general, Form 1099s are used to compile information regarding payments a company made to you during the course of the tax year. Form 1099-MISC aggregates payments made to you for services you performed. Form 1099-INT, also referred to as the interest statement, lists interest paid to you. Form 1099-DIV provides information on dividends paid to you.
Miscellaneous Income: 1099-MISC
Form 1099-MISC, Miscellaneous Income, is the form that you receive if you provided services to a company as an independent contractor or unincorporated business. These can include business services, rental income or royalty income. However, you will receive this form only if you received $600 or more in total payments for rent or services or $10 in royalties during the previous calendar year. The company will provide you with a copy to you and another to the IRS.
Interest Statement - 1099-INT
Banks, brokerage firms, credit unions and other financial institutions that offer interest-bearing accounts must provide interest statements, or Form 1099-INT to applicable account holders. Form 1099-INT provides your interest earnings on savings, checking and money market fund accounts. If you earned more than $10 in interest in a tax year as an account holder, you will receive Form 1099-INT electronically or in the mail. In this case the interest statement and the 1099 are one and the same.
Dividends and Distributions - 1099-DIV
Form 1099-DIV is another IRS information statement that provides information on dividend payments or distributions made to shareholders or account holders on non-retirement accounts. If you are a shareholder, money market fund holder or mutual fund account holder, your brokerage firm or mutual fund provider will send you 1099-DIV if you received $10 or more in dividends. If you are a shareholder in a private corporation and received distributions, that corporation must also send you Form 1099-DIV.
1099s are information forms serving various purposes. The interest statement is one type of 1099; the dividend and distributions statements another. There are many types of 1099s, and they are all used to report income that typically is not reported through another means. You must typically include any type of Firm 1099 you receive with your tax return when you file your taxes, just as you include your W-2 statements.
You have $10,000 in a money market at your mutual fund provider. Your money market earns 3 percent interest and some dividend yield. At the beginning of the year following the end of the tax year, your mutual fund provider sends you an interest statement (Form 1099-INT) for the interest it paid you. The firm also sends you the dividends and distribution statement (Form 1099-DIV) for the dividends it paid on your account.
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