Form 1099 Definition

The Form 1099 definition is used by the Internal Revenue Service (IRS) determine the amounts of income that is not in the form of wages, salary, and tips. An individual’s employer fills out the 1099.

Form 1099 Meaning

A form 1099 meaning is very similar to the business form W2. Often times a company will have to fill out hundreds of this form. Its requirements are that the employer submit three copies for every 1099 form. One is for the business, one is for the employee, and the other is for the IRS itself.
Another 1099 requirement is that the company post the forms electronically if the amount per year is in excess of 250 forms. Independent contractors most often use the form because the IRS considers the payments to a contractor to be non-employee compensation. Thus, for each job that an independent contractor performs there must be a form 1099 filled out. If the amount paid is less than $600 then there need not be a form filled out by the employer or business. There are currently 16 types of 1099 which all refer to a different form of non-wage income. These forms range from distributions made from pension funds to real estate transactions.

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