Definition: The 1099-MISC (download) is a form used to report to the IRS income paid to an independent contractor. It is also used to report rent, royalties and a variety of other types of income. For independent contractors who work from home, often in freelancing or consulting, it is commonly used to report nonemployee compensation (box 7). Typically, independent contractors report the income in box 7 on their Schedule C.
If you are paid $600 or more dollars as an independent contractor by one company, that company should issue you a 1099-MISC by January 31 of the following year. The deadline can occasionally be later if January 31 falls on a Saturday or Sunday.
Likewise, if in your business you pay an independent contractor $600 or more, you must issue him or her a 1099 by that due date. You must file a copy with the IRS as well. See IRS 1099-MISC form for more details.
Note: If you are an employee that telecommutes from home, you should receive a W-2 form reporting your income and the taxes withheld, not a 1099.
Disclaimer: I am not a tax attorney, CPA or tax preparation specialist. The information here is meant as a general guide. For specific questions about your own taxes, please refer to IRS publications or consult a tax specialist.
Also Known As: 1099, 1099MISC