What Is a 1099?
A 1099 is an IRS information return — a form that reports income you received outside of traditional employment. If you earned money as a freelancer, received interest from a bank, sold investments, or got a pension payout, someone sent both you and the IRS a 1099.
The key difference from a W-2: employers send W-2s for employees. Everyone else sends 1099s.
The Most Common 1099 Types
1099-NEC: Non-Employee Compensation
Who gets it: Freelancers, independent contractors, consultants, gig workers.
Trigger: $600 or more paid by a single client for services in a calendar year.
Deadline: January 31 (sender must mail it to you by this date).
This is the form you'll see if you drive for Uber, do freelance design, consult, or do any work as an independent contractor. All income in box 1 flows to Schedule C and is subject to self-employment tax (15.3%) on top of regular income tax.
1099-MISC: Miscellaneous Income
Who gets it: Landlords, prize winners, royalty recipients, legal settlement recipients.
Common boxes:
- Box 1: Rents
- Box 2: Royalties
- Box 3: Other income (prizes, awards)
- Box 10: Crop insurance proceeds
Note: Self-employment income moved out of 1099-MISC and into 1099-NEC in 2020.
1099-INT: Interest Income
Who gets it: Anyone who earned $10+ in interest from a bank, credit union, or brokerage.
Where it goes: Schedule B, then Line 2b of Form 1040. Taxed as ordinary income.
1099-DIV: Dividends and Distributions
Who gets it: Investors who received dividends from stocks or mutual funds.
Key boxes:
- Box 1a: Total ordinary dividends (taxed as ordinary income)
- Box 1b: Qualified dividends (taxed at lower capital gains rates: 0%, 15%, or 20%)
- Box 2a: Total capital gain distributions
1099-B: Proceeds from Broker Transactions
Who gets it: Anyone who sold stocks, bonds, mutual funds, or crypto.
Reports proceeds and, where available, cost basis. Use this to calculate capital gains/losses on Schedule D.
1099-R: Retirement Distributions
Who gets it: Anyone who took a distribution from an IRA, 401(k), pension, or annuity.
Box 7 contains a distribution code — code 1 means early distribution (possible 10% penalty), code 7 means normal distribution.
1099-K: Payment Card and Third-Party Network Transactions
Who gets it: Anyone who received payments via credit card, PayPal, Venmo, Etsy, eBay, etc.
2026 threshold: $2,500 (the IRS is phasing down to $600 — check current IRS guidance). Even if you don't receive a 1099-K, income from selling goods or services is still taxable.
What to Do When You Receive a 1099
- Check the numbers match your records. Errors happen. If the amount is wrong, contact the payer for a corrected 1099.
- Don't wait for a 1099 to file. You must report all income even if you don't receive a form.
- Report it on the correct schedule:
- 1099-NEC → Schedule C (self-employment income)
- 1099-INT / 1099-DIV → Schedule B
- 1099-B → Schedule D
- 1099-R → Line 4 or 5 of Form 1040
1099-NEC and Self-Employment Tax
If you receive a 1099-NEC, you owe self-employment tax (SE tax) in addition to income tax:
| Tax | Rate | Notes |
|---|---|---|
| Social Security | 12.4% | On net earnings up to $176,100 (2026) |
| Medicare | 2.9% | No cap |
| Combined SE Tax | 15.3% | You deduct half on Schedule 1 |
The effective rate is lower because you deduct 50% of SE tax from gross income before calculating income tax.
Use our Self-Employed Tax Calculator to estimate your full 1099 tax bill.