One of the several tax forms distributed by IRS, Form 1099 is used in the United States to report various types of income other than wages, salaries, and tips. The form is primarily used to report payments to independent contractors, income from rental properties, and income from interest and dividends.
Some Form 1099 reports may include amounts that are not actually taxable to a particular person, however. For example, Form 1099-S requires the reporting of proceeds from real estate transactions, however, the actual amount that will be taxed is the gain on the transaction. This gain representing the taxpayer’s basis amount on the property sold deducted from property’s proceeds.
Each transaction covered under Form 1099 requires a filed form to the IRS.
