Tax Dictionary – 1099-MISC

IRS Definition

You will receive Form 1099-MISC from a payer that paid you:

  • at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;
  • at least $600 in:
    • rents;
    • services performed by someone who is not your employee;
    • prizes and awards;
    • other income payments;
    • medical and health care payments;
    • crop insurance proceeds;
    • cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish;
    • generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
    • payments to an attorney; or
    • any fishing boat proceeds,
  • For direct sales of at least $5,000 of consumer products for resale anywhere other than a permanent retail establishment.

More from H&R Block

The most common reason that you might receive a Form 1099-MISC is for non-employee compensation. If a business pays you for services, but does not classify you as an employee, then you should receive a Form 1099-MISC if they paid you over $600 in a tax year. The amount of compensation will be shown in Box 7. Even though you may not think of yourself as having a business, for tax filing purposes, you are considered self-employed if you receive a Form 1099-MISC with income in box 7.

You can also receive a Form 1099-MISC for any of the other reasons listed in the IRS definition. Any income reported on a Form 1099-MISC must be reported as income on your tax return.

Missing Form 1099-MISC’s are a common reason for the IRS to send notice CP2000. Learn how to handle an underreporter inquiry (CP2000 notice).

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