The purpose of tax Form 1099 is to report income generated from sources other than the salary an employer pays. Additionally, this tax form is used to report large sales of consumer products to a buyer in a location other than a permanent place of business.Continue Reading
Tax Form 1099 is given out to individuals who have received at least $10 in broker payments or royalties instead of tax-exempt interest or dividends. It is also given to those who own a portfolio of stock investments and to people who have earned at least $600 of other income payments. This includes earnings from rent, awards or prizes, services, health care or medical payments, crop insurance proceeds and any cash paid from NPC, or Notional Principal Contract, to an estate or individual.
In addition, Form 1099 must be filed for individuals who received cash payments in excess of $600 for aquatic life and are formally engaged in the business or trade of catching marine life. Furthermore, Form 1099 is given to lawyers or other independent contractors who have accepted at least $600 during the year.
Buyers who have sold large volumes of consumer products to an entity whose place of business was an establishment other than its permanent location also need to file Form 1099.
Debt cancellation is treated as taxable income and must be reported with Form 1099.
Finally, individuals who have withheld any amount of federal income tax under the backup withholding laws are required to file this form.Learn more about Taxes