Not Every 1099 Raises Your Tax Bill


MoneyTips

If you’re a traditional employee, every year you receive a W-2 form from your employer that records your earnings for the year and the amount of taxes withheld from those earnings. IRS 1099 forms are complements to the W-2 form for non-traditional employee relationships. They are generally designed to record sources of income that have not been subjected to withholding – in other words, sources where an employer has not already paid the corresponding taxes.

If you are self-employed, you know the IRS form 1099-MISC that reports payments made to you over the course of the year. However, there are many different types of 1099 forms – and not all of them increase your tax bill.

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