Types of 1099 Forms
| Form | What It Reports | Who Sends It |
|---|---|---|
| 1099-NEC | Nonemployee compensation (freelance/contractor income $600+) | Clients/businesses that hired you |
| 1099-MISC | Rent, prizes, attorney payments, other miscellaneous income | Payers of miscellaneous income |
| 1099-INT | Interest income ($10+) | Banks, credit unions |
| 1099-DIV | Dividends and distributions from investments | Brokerages, mutual funds |
| 1099-B | Proceeds from selling stocks, bonds, or other securities | Brokerages |
| 1099-R | Distributions from retirement accounts (401k, IRA, pension) | Plan administrators |
| 1099-G | Government payments (unemployment benefits, state tax refunds) | Federal/state governments |
| 1099-K | Payment card and third-party network transactions (PayPal, Venmo, etc.) | Payment processors |
| SSA-1099 | Social Security benefits received | Social Security Administration |
1099-NEC: The Freelancer's Form
If you do any freelance, consulting, gig work, or independent contracting, the 1099-NEC is your most important form. Any client who pays you $600 or more during the year must send you a 1099-NEC by January 31st.
If a client paid you $400 (under the $600 threshold), they aren't required to send a 1099 — but you're still legally required to report that income on your tax return.
Self-Employment Tax: The Big Difference from W-2 Income
When you receive 1099 income, you're self-employed and must pay both halves of FICA — called the Self-Employment Tax:
- Social Security: 12.4% (on net self-employment income up to $168,600)
- Medicare: 2.9% (on all net self-employment income)
- Total Self-Employment Tax: 15.3%
The good news: you can deduct half of this tax from your gross income (above-the-line deduction), reducing your taxable income.
Quarterly Estimated Tax Payments
Unlike W-2 employees who have taxes withheld automatically, 1099 workers must make quarterly estimated tax payments to avoid an underpayment penalty.
2024 quarterly deadlines:
- Q1 (Jan–Mar income): April 15, 2024
- Q2 (Apr–May income): June 17, 2024
- Q3 (Jun–Aug income): September 16, 2024
- Q4 (Sep–Dec income): January 15, 2025
Business Deductions for 1099 Workers
- Home office (dedicated space used regularly and exclusively for business)
- Business equipment and supplies
- Health insurance premiums (100% deductible)
- Vehicle use for business (standard mileage rate: 67 cents/mile in 2024)
- Professional development and education
- Business portion of phone and internet
- Software and subscriptions
- Retirement contributions (SEP IRA, SIMPLE IRA)