1099
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A family of US tax forms used to report various types of non-employment income, including freelance earnings (1099-NEC), investment income (1099-DIV/INT), and miscellaneous payments.
## 1099 Forms
The 1099 series reports non-wage income to the IRS. The most relevant for salary discussions is the 1099-NEC (Non-Employee Compensation) for freelancers and contractors.
### Common 1099 Forms
| Form | Reports |
|------|---------|
| 1099-NEC | Freelance/contractor payments ≥ $600 |
| 1099-MISC | Rent, royalties, prizes |
| 1099-DIV | Dividends |
| 1099-INT | Interest |
| 1099-B | Brokerage transactions |
| 1099-R | Retirement distributions |
| 1099-K | Payment platform transactions |
### 1099-NEC and Self-Employment
Freelancers who receive 1099-NEC forms must:
- Pay self-employment tax (15.3%) on net earnings.
- Make quarterly estimated tax payments.
- File Schedule C (Profit or Loss from Business) with Form 1040.
- Can deduct business expenses to reduce taxable income.
### W-2 Employee vs. 1099 Contractor
Misclassification of employees as 1099 contractors is a common compliance issue that can result in back taxes, penalties, and lawsuits.