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The tax information return most familiar to the greatest number of people is the Form W-2, which reports wages and other forms of compensation paid to employees.There are also many forms used to report non-wage income, and to report transactions that may entitle a taxpayer to take a credit on an individual tax return.
The payor was required to report the name and address of the payee and the total amount of payments on Form 1099 and sent to the Internal Revenue Service by March 1 of the year following the payments. The payor was required to include Form 1096, a letter of transmittal and affidavit certifying the accuracy of each Form 1099. [34] [35]
Information returns are reports used to transmit information about income, receipts or other matters that may affect tax liabilities. For example, Form W-2 and Form 1099 are used to report on the amount of income that an employer, independent contractor, broker, or other payer pays to a taxpayer.
Form 1099-NEC replaces 1099-MISC as the form used to report independent contractor income. If you paid an independent contract $600 or more, you’ll need to file one.
But if the 1099 income you forget to include on your return results in a substantial understatement of your tax bill, the penalty increases to 20%, which accrues immediately.
The window of time to report last year's income to the IRS is rapidly closing. One of the most important documents for getting your returns filed accurately and on time is Form 1099 -- but what...
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