What Is the Difference Between the 1098 & 1099 Tax Forms?
The Internal Revenue Service (IRS) requires the reporting of specified businesses transactions on information returns. Forms 1098 and 1099 are two types of these returns. Form 1098 is a Mortgage Interest Statement, and Form 1099 is for reporting taxable income that does not fall under the category of salary, wages or tips.
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Form 1098 Specifics
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If you paid $600 or more in mortgage interest (including points) during the year, you will receive a Form 1098 telling you how much you paid. If you have a business and receive $600 or more in mortgage interest from an individual, including a sole proprietor, you must send that person and the IRS a Form 1098 to report the amount received. However, you are not required to file Form 1098 for interest received from a corporation, partnership, trust, estate, association or company (except a sole proprietor).
Other Form 1098s
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An organization that received a contribution of a qualified vehicle with a claimed value of more than $500 must file a separate Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, with the IRS for each vehicle. Form 1098-E is a Student Loan Interest Statement and Form 1098-T is a Tuition Statement that eligible educational institutions must file for each enrolled student involving specified financial transactions.
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Form 1099-Misc
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A Form 1099-Misc is used to report a variety of income, including attorney, fees and gross proceeds; nonemployee auto reimbursements, awards, bonuses, car expense, commissions, compensation and fees; crop insurance proceeds; damages; direct sales of consumer products for resale; directors' fees; fishing boat crew members proceeds; health care and medical services; and rents.
Other Form 1099s
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A Form 1099-Div reports dividends and distributions, a Form 1099-Int reports interest income and a 1099-B reports proceeds from broker and barter exchange transactions. The many other types of Form 1099 include 1099-A, Acquisition or Abandonment of Secured Property; 1099-LTC, Long-Term Care and Accelerated Death Benefits; Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments; and 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs and Insurance Contracts.
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