Updated December 2, 2020: Ah, the 1099-MISC form. Along with W-2 forms, it’s the IRS’ way of politely saying, "I know what you’re doing, and you cannot lie to me." If you’re a freelancer, your tax season is chock full of 1099-MISC forms. They pile up everywhere: at your desk, on the kitchen table, in the bathroom (great reading material!).
But what happens if you’re missing one?
Missing a 1099-MISC form? Don’t panic
Like W-2s and other tax forms, 1099-MISC forms need to be sent out by January 31st. If you haven’t received one by the end of February, you might be wondering where it went.
First off, clients only have to send you a 1099-MISC form [PDF] for the tax year if they pay you more than $600 for services rendered or more than $10 in royalties or broker payments. Note that this doesn’t mean that this income is not taxable – Uncle Sam wants his cut regardless of how much money you earned from a specific source.
More importantly, you don’t actually need the 1099-MISC forms to file your taxes. Unlike W-2s, the IRS does not request that you attach your 1099-MISC forms to your tax return. Assuming you’ve accurately tracked your income, this shouldn’t be a problem. The 1099 forms that the IRS will receive from your clients will match up with your reported income. Here's a freelancer's guide to 1099-MISC forms.
If you haven’t accurately tracked your income, try to overcompensate. The IRS will never ding you for over-reporting your income, but they might audit you if you under report it.
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Should you even ask for it?
Most freelancers assume that if they don’t get a 1099-MISC form on time, they should contact the company and ask for a copy. But that might actually be a bad idea: if the company issues a copy incorrectly, the IRS may think you’ve made that income twice. If that sounds like a stupid mistake to make, just remember why you became a freelancer in the first place.
How to avoid missing 1099-MISC forms in the future
The biggest reason people lose 1099-MISC forms is outdated or incorrect addresses. When you’re signing on as a client and filling out your tax forms, make sure you enter your addresses correctly and neatly. If you move during the year, make sure you contact each of your clients and update them with your latest address.
While you should be carefully tracking your income, ultimately making 1099-MISC forms superfluous, it’s nice to get them in the mail. They allow you to double-check your own bookkeeping, plus there might be candy in the envelope! (There won't be.)
Filing your taxes can get confusing. Here's an easy guide on how to do your taxes.
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Image: Dean Mitchell