Tax Questions Blog
Do I have to claim a 1099 form on my taxes?
Some people receive 1099 forms and wonder ‘do I have to claim a 1099 form on my taxes’. There are many types of 1099 tax forms and they are for different transactions.
If you have received a 1099 form, then you must use the information on that 1099 form to file your tax return. For example, if you received a 1099-MISC for miscellaneous income, then you have to report that income to the IRS. The IRS will want to know if you received a 1099 form for that source of income.
Using tax software to claim a 1099 form on your taxes
If you are filing online using a tax software such as Turbo Tax or Taxcut (you can file your taxes for free here), then the tax software will take care of the 1099 form for you. The software will ask you about all the 1099 forms that you have received. You need to input the information as seen on the 1099 forms into the tax software and let it calculate your tax liabilities.
What happens if I do not claim a 1099 form on my taxes?
If you received a 1099 form, then you must report whatever information on that form to the IRS on your tax return. The company that sends you the 1099 form should already have made sure that all the information is correct and that they are all reportable transactions that must be reported to the IRS.
If you find that the information on the 1099 form is incorrect or the transaction is not required to be reported to the IRS, you must take it up with the company that sent you the 1099 form. If you do not have the company correct the information and sent you a brand new, corrected 1099 form, then the IRS may have the wrong information and will think that you owe more than you actually do.
When the IRS tries to match information on your tax return to the 1099 forms they have on file and they do not match, the IRS will send you a letter demanding the difference in tax liabilities. If you have a corrected 1099 form, then you can send that to the IRS as a proof that you are correct. However, if you do not have the 1099 form, you will not have a proof and may end up having to pay more taxes.
So, if you receive a 1099 form, you must report it on your tax return to avoid a problem later on. If you think there is a mistake on your 1099 form or you should not have received it, take the matter up with the company because it is likely that you will have to prove to the IRS later why you did not claim it on your taxes.
Tax Questions is a resource and information website only. We do not offer individual advice. For specific tax questions and answers, you are advised to consult your tax attorney.