As a business owner, you not only need to do work for your clients and customers, but also handle the back-office tasks. This includes billing, accounting, marketing, and taxes. Tax forms you’re likely to have to manage include those that begin with the numbers 1099. Series 1099 forms are used to report various types of income you receive.
Let’s take a look at a few that you may receive and be required to include with your tax return.
- 1099-A: Acquisition or Abandonment of Secured Property: Sometimes bad things happen. You may have borrowed money from a bank or other lender to purchase property, and you had it foreclosed on, or you abandoned it. In this case, you may have to treat the property as if you sold it. The lender will send you Form 1099-A with all the relevant information needed to report the “sale” on your tax return.
- 1099-B: Proceeds from Broker and Barter Exchange Transactions: When you start out in your business, you may do some bartering until you get regular clients. You would receive this form if you engaged in bartering with someone else, or took part in a bartering exchange.
- 1099-C: Cancellation of Debt: You may have taken out a loan to start your business. Your lender may decide to cancel the balance on your loan in certain circumstances. If this happens, you will have to recognize the amount forgiven as income. If this happens, you should receive a 1099-C showing how much of the forgiven loan you need to record as income.
- 1099-K: Merchant Card and Third Party Network Payments: You will receive this form if you received money from any online sales you made during the year. As with any of the forms you receive, you will want to make sure the amounts on these forms matches your records. If not, give the sender a call to discuss what is causing the discrepancy.
- 1099-MISC: Miscellaneous Income: You are probably well aware of this form and the information included on it. This form shows the amounts your client has paid you for the work you did for them.
- 1099-S: Proceeds from Real Estate Transactions: You would receive this form if you sell:
- Land, whether improved or unimproved
- A residential, commercial, or industrial building
- A condominium unit
- Stock in a cooperative housing corporation