What is a 1099?
A 1099 is a record of payment made to a sole proprietor, partnership or a single-person LLC. Historically, most companies didn't issue a 1099 unless the person receiving it was in the medical or legal field. That's all about to change!
Beginning in 2012, all persons & businesses must be issued a 1099 (the 1099-MISC) when they receive $600 or more for work or services performed. There are other kinds of 1099s that are required by law. In summary, they are:
- 1099-MISC - You or your company does work or provides services for which you are paid $600 or more
- 1099-INT - You or your company lent some money to another person or company, and as a result of the loan have received $10 or more in interest income
- 1099-DIV - You or your company used excess cash to invest in stocks and received payments of dividends
- 1099-B - You or your company sold stock or engaged in barter transactions
The most common is the 1099-MISC, which is probably what most people mean when they talk about 1099s.