Internal Revenue Service Form 1099 is used to record income sources not recorded by wages through W-2 forms. There are various places you might receive a 1099 from including but not limited to independent contractor work, dividends, interest or proceeds from real estate transactions. These forms must be sent by the end of January in the year following the earnings; it is sent to both the IRS and you. Keeping track of 1099 income helps more adequately prepare you for filing taxes.
Make a list of all possible income sources. For most people this includes bank interest-bearing accounts, brokerage firm accounts, real estate and life insurance accounts. Freelancers and independent contractors should also keep a list of clients; most clients require a W-2 for any monies earned over $600 per year. Create a file with copies of these forms to use later.
Use a spreadsheet or accounting program to track all income generated from 1099 sources.
Wait to receive the 1099 form in late January or February in the year following the earnings. Compare the 1099 to the list of income sources and W-2s you filed. Further compare the amounts earned to your spreadsheet to ensure the information is correct.
Contact any source that you didn't receive a 1099 from. Upon request, you are entitled to a duplicate 1099 for your taxes. The sooner you call, the more likely you are to get the information needed for taxes.
With more than 15 years of professional writing experience, Kimberlee finds it fun to take technical mumbo-jumbo and make it fun! Her first career was in financial services and insurance.