What’s a 1099 tax form?

This week, 1099 tax forms are being sent out. You should be receiving one by mail or email from every client or platform that paid you over $600 in 2019.  Below is everything you need to know (and not a word more!) about this form, and what you’ll need to do next.


What is a 1099 tax form?

A 1099 tax form reports the total income you earned from a freelancing client or contracting platform. Whether you drove for Doordash, freelanced on Upwork, or ran your own professional services business, you should be receiving some version of this form in the mail between now and February 1st. It’s important to keep track of this form because you’ll need it in order to file your taxes.


What if I haven’t gotten one?

The forms are required to be sent by Feb 1st - so you still have two weeks before you should be worried.

If, after Feb 1st you still haven’t received them, you should go through the following checklist:

  • Are you sure you earned more than $600 from this platform / client? If not, then you won’t be needing the form. Note: this limit might be higher, depending on the platform. See examples below.
  • Check your email & spam folder. Sometimes platforms send these forms digitally.
  • If you moved last year, it’s likely that the forms were sent to the wrong address. In this case, you should reach back out to the platform / client and request they be re-sent.

Also, many big contracting platforms have much higher limits for sending the form:

  • PayPal, and Upwork only send out 1099 forms if you made over $20,000 and had at least 200 deposits.
  • Uber, Lyft, only send a 1099-K or if you earned more than $20,000 driving, or more than $600 from driver referrals and other miscellaneous payments.
  • Online consumer product sales platforms such as Etsy, Amazon, and Shopify only send you a 1099 tax form if you earned more than $20,000 and had over 200 sales.

If you fall below any of these limits, you’ll need to go through and add up your income from the platform / client yourself. This is typically something you can do by logging into the platform dashboard and viewing a record of your transactions and adding them up one-by-one. Do not include any commissions and fees paid to the platform - just add up the total money you received from the platform. Note: We’re working on adding a way to automatically sum up this income from your bank statements, at Keeper Tax.


How to interpret a 1099 tax form

A 1099 tax form simply sums up the total payments made to you as a contractor over the course of the year.

There are many subtypes of 1099 tax forms you can receive. You don’t need to worry too much about what kind of form you received - they all work pretty much the same way. For contractors and freelancers, the most common ones are forms 1099-MISC and 1099-K. For now, just hold onto the form. You’ll need to input it into Keeper Tax when you file your taxes.


What NOT to do

If you receive a 1099 tax form, use it. DO NOT report a different income than what’s on your form. For example, if the income total on your 1099 tax form includes commissions and fees, you’ll need to separately report those as tax deductions (we can help). This is critical, because the same form you received was also sent directly to the IRS by the platform / client directly. Reporting a different number will cause an immediate risk of audit.

If you earned more than $600 but didn’t receive a 1099 form, that does NOT mean you can skip reporting this income to the IRS. That’s tax fraud, and can get you in serious trouble.

Erin A F McCloskey, EA, CFP®, MBA, CLTC

Erin is a financial planner and tax preparer. She loves to optimize everything, plan travel and win at board games.

Erin A F McCloskey, EA, CFP®, MBA, CLTC

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Note: at Keeper, we care about helping you save on taxes. That leads us to generalize tax advice which ultimately cannot be completely generalized. Everyone's situation is different. Please drop a note above or reach out via email if you have questions.