1099 Form

What Is a 1099 Form?

A 1099 form is part of a series of tax documents used to report payments made to non-employees (i.e., independent contractors, freelancers, or sole proprietors). A copy must be provided to the Internal Revenue Service (IRS) and the payee, who must then report that income when they do their own taxes. This way, the IRS knows if there’s a discrepancy between the reported income on a tax return and the total income a person actually received.

W-2 vs. 1099

A W-2, also called a Wage and Tax Statement, is used to report payments to traditional employees. Employers are required by the IRS to use W-2 forms to report earnings, withholdings, and other benefits paid to each employee during the previous tax year. Some of the details found on a W-2 include:

If you’re wondering whether to use a W-2 vs. 1099 form, consider whether you do any of the following for the individual providing services:

If you do, they likely should be classified as an employee and you must use a W-2 to report their earnings.

Pay your people confidently.

BambooHR makes running your payroll (and filing taxes) easy, quick, and stress-free.

Learn More Today

What Is a 1099 Form Used for?

1099 forms are used to report various types of income outside of payments made to traditional employees, such as interest from a bank, investment dividends, or compensation for freelance work. While there are more than a dozen different 1099 forms, most taxpayers only need to worry about the following:

Who Gets a 1099 Form?

Only taxpayers who receive income other than wages, salaries, or tips reported on a W-2 will get a 1099 form. The type of 1099 sent depends on the payment issued. For instance, if you’ve made payments to an independent contractor for their freelance services during a given tax year, you’ll need to file a 1099-NEC form for that tax year.

The deadlines to submit 1099 forms to the IRS and the individual vary, depending on the form type and whether you file electronically. While some exceptions apply, there is a failure-to-file penalty if you don’t submit the correct information by the specified due dates. (See 2023 IRS instructions for more information.)

Can I Print My Own 1099 Forms?

If you need to issue a 1099 form, you can't print them yourself. Here are four primary ways to get 1099 forms:

  1. You can order them from the IRS.
  2. Get physical, blank forms from an office supply store.
  3. Use a third-party online service to create 1099s for you.
  4. Use third-party tax prep software for businesses.

To submit paper 1099s to the IRS, you must also include Form 1096.

1099 Form 2023

Beginning in the 2023 tax year, you can e-file 1099 forms via an online portal on the IRS website. Known as the Information Returns Intake System (IRIS), this electronic service may be especially helpful for small businesses required to submit 1099 paper forms to the IRS.

Using the online portal, you can securely upload, create, and edit information. It also allows you to download your completed 1099 forms for distribution. The system retains issuer information and lets you know if your tax forms are missing key information.

Compensation doesn't have to be complicated.

From tax deductions to direct deposit, BambooHR makes it easy to manage your team's total compensation in a single, centralized system.

Learn More Today