How to Read Your 1099

Money earned from selling your house is reported on form 1099-S.

The Internal Revenue Service (IRS) lists 17 varieties of Form 1099, all used to tell the IRS about income unrelated to traditional employment. Most people never see the full variety of 1099 forms. If you receive a 1099, it is most likely to be form 1099-INT for interest income or 1099-MISC for general purposes. If you have stocks, you may receive a 1099-DIV or 1099-B. If you sold your home in the last year, you may receive a 1099-S. No matter which version of the form you have, understanding each entry will let you know if you are paying the appropriate amount of tax on your income.

Instructions

1. Locate the box on the form that shows the year in large type. This is not a numbered box, and it is located at the upper-right corner of the form. Below the number, look at the code after "1099." This will tell you which type of 1099 form you have received, such as a 1099-INT or 1099-MISC. Knowing this lets you know which type of income is reported on the form.

2. Read the "Payer's Information" box in the upper-left corner if you don't know who the 1099 is from. This box indicates the person or individual who paid you. It may be a stock company, the bank used in your home sale, a person you worked for as a contractor or anyone else that gave you money during the year.

3. Look over the information in the "Recipient information" boxes carefully to ensure the payer filled in your name, address and account information correctly.

4. Look at the numbered boxes on the form. These each have a small number in the upper-left corner and a short line of text across the top. The short text indicates a type of payment, such as "Tips" or "Non-employee compensation" on a 1099-MISC or "Qualified dividends" on a 1099-DIV. Ignore any boxes that do not have numbers below the description; they do not apply to you.

5. Look at the amounts in each box that is filled in with a number. If you do not understand the abbreviated description at the top of the box, look at the back or lower portion of the form for a long description.

6. Verify that the amount in each box matches any amount you received as income or an amount that was withheld from that income, based on the box's description. For example, make sure Box 1 on form 1099-INT, "Interest paid," matches the amount of interest you received from the payer, based on your own banking records.

7. Locate the recipient instructions on the bottom or back of the form. These instructions are the same ones that contain further explanations of the short descriptions in each box. These descriptions tell you exactly where to place the 1099 information on your 1040 when completing your tax return.

References

• IRS: General Instructions for Certain Information Returns (PDF)
• H&R Block: Tax Tips and Calculators
• IRS: Form 1099-MISC (PDF)
• IRS: Form 1099-DIV (PDF)
• IRS: Form 1099-INT (PDF)