The 1099 is a form that reports earnings from self employment, interest and dividends, and government payments. Different 1099 forms report the different types of income a person receives throughout the year apart from the employer's wages, states Intuit TurboTax.
Independent contractors prepare their tax returns on income reported to them on Form 1099-MISC. This is a form that independent contractors receive from each client that pays them at least $600 during the tax year. Form 1099-DIV reports dividends and distributions a stock or mutual funds investor receives during the year while Form 1099-INT reports periodic interest payments from other types of investments other than dividends, states Intuit TurboTax.
The federal and state governments use Form 1099-G to report the tax refunds and unemployment compensation a tax payer receives during the year. On the other hand, Form 1099-R covers withdrawals from an individual retirement account and other types of distributions a person receives from pension plans and other profit-sharing plans.
Lastly, Form 1099-C covers debt cancellations. If a creditor cancels a portion of a debtor's outstanding debt, the Internal Revenue Service treats the debt cancellation as income taxable to the creditor. The creditor sends the debtor Form 1099-C to report the amount of debt it cancels. The debtor is required to report that amount on the tax return, reports Intuit TurboTax.