Blog: Understanding 1099 Forms: A Guide for Personal Tax Returns
If filing your personal taxes feels like someone handed you a stack of envelopes and said, โGood luck, hope you figure out which ones matter,โ youโre not alone. Every January, mailboxes and inboxes fill up with mysterious little forms, most of them labeled โ1099โ, and youโre left wondering: Is this important? Do I need to do something with it? What happens if I lose one?
Take a breath. We totally understand. 1099s look intimidating, but at their core, theyโre simply the IRSโs way of keeping track of income that didnโt come from a traditional employer. And understanding them makes filing your tax return smoother, faster, and a whole lot less stressful.
In this guide, weโll walk through the most common 1099s individuals receive, what they mean, when to expect them, and how they impact your personal tax return. By the end, youโll feel a whole lot more confident tackling tax season.
What Exactly Is a 1099?
Think of a 1099 as the IRSโs version of a bank statement. Itโs how the government tracks income that isnโt reported on a W-2.
If you earned money, received interest, took out retirement funds, sold investments, or even got state unemployment, thereโs probably a 1099 for that. Your job is simple:
Gather the forms โ Ensure nothing is missing โ Input them on the tax return
So why does this matter?
Because if the IRS gets a 1099 with your name on it and you donโt include that income on your tax return, theyโll send you a lovely letter later and nobody wants that surprise.
There are dozens of 1099 varieties out there, but most individuals only see a handful. Letโs break down the ones youโre most likely to receive.
(Looking for business 1099 info? Click here!)
The Most Common 1099s for Personal Tax Returns
Below are the forms the average taxpayer is most likely to encounter, whether youโre earning, saving, investing, or just navigating life.
1099-INT: Interest Income
This one comes from banks, credit unions, investment accounts, and anyone who paid you $10 or more in interest.
Youโll receive a 1099-INT for things like:
Brokerage, Investment and Savings account interest
Interest from CDs (Certificates of Deposit)
Credit union dividends (yes, they count as interest)
Interest the IRS paid you from a prior year refund
Even small amounts count. A good rule of thumb is if a bank reports it, it should be included.
1099-DIV: Dividends & Distributions
If you own stocks, ETFs, mutual funds, or a brokerage account, expect this form.
It reports:
Ordinary dividends
Qualified dividends (taxed at lower rates)
Capital gain distributions
Foreign tax paid
Even if you reinvested everything, itโs still taxable. This one is easy to overlook, so itโs worth double-checking when youโre gathering your forms.
1099-B: Investment Sales
Sold any stocks or crypto? Then youโll get a 1099-B in your consolidated brokerage statement.
It shows:
What you sold
When you bought it
The cost basis
Your gains or losses
Whether theyโre short-term or long-term
This is one of the most important forms for accurate filing, especially if you had lots of trades.
1099-R: Retirement Income
This one reports distributions from:
401(k)s
IRAs
Pensions
Annuities
Rollovers
Not all distributions are taxable, but the 1099-R will tell you how much is. If you took money out (or rolled it over), donโt file without this form.
1099-SSA: Social Security Benefits
If you receive Social Security, youโll get a 1099-SSA each January.
It reports:
Total benefits received
Medicare premiums deducted
Taxable portion
Not everyone pays tax on Social Security, but the IRS uses this form to calculate it.
1099-G: Government Payments
This one covers:
Unemployment
State tax refunds
Some government grants
Unemployment payments are taxable.
State tax refunds may be taxable depending on last yearโs return. This one trips people up every year.
1099-NEC or 1099-MISC: Side Income
Even if youโre not a freelancer or small business owner, you might receive one of these forms if you:
Did a small side gig
Helped someone with a project
Got paid for a hobby that turned into income
Received rent or royalty income
If you got paid $600 or more, expect a form. If you didnโt receive one but you earned income, you still need to report it. You can check out our biz 1099 blog post here for more info!
1099-K: Third-Party Payment Apps
This form is issued by:
Venmo
PayPal
Cash App
eBay
Etsy
Stripe
Important:
This form is NOT for personal reimbursements.
If your bestie paid you back for dinner, you can ignore it.
Youโll receive a 1099-K if your total business-related payments exceed the IRS thresholds for the year. Thresholds change annually, so keep an eye out or ask your tax professional!
1099-S: Real Estate Transactions
Sold a house or land? Youโll get a 1099-S if the sale was reportable.
Even if the gain is excluded (like the home-sale exclusion), you may still need the form.
1099-Q: 529 Plan Distributions
If you used money from a 529 for education expenses, youโll get a 1099-Q.
Used correctly (for qualified education costs like tuition, required fees, books, or certain room and board) โ often tax-free.
Used incorrectly (for non-education expenses) โ the distribution may be taxable and could include penalties.
1099-SA: HSA or MSA Distributions
If you took money out of your Health Savings Account, this form shows how much you withdrew.
Used for qualified medical expenses โ generally tax-free.
Used for non-medical expenses โ may be taxable.
Soโฆ What Do You Actually Do With All These Forms?
Hereโs the simple checklist:
โ๏ธ 1. Make a list of what you're expecting
Bank accounts, investments, retirement accounts, apps you used, etc.
โ๏ธ 2. Wait until at least mid-February
Not all forms arrive in January, many are required to be mailed and postmarked by January 31st. If that falls on a weekend, the deadline is moved to the next business day.
โ๏ธ 3. Compare your list to what you actually received
If somethingโs missing, request a copy.
โ๏ธ 4. Keep everything together
A single folder, physical or digital, works wonders.
โ๏ธ 5. Keep track of all income, even if you never received the form
FYI: If the IRS got a copy, they expect you to include it.
What If You Donโt Get A 1099 From Somewhere You Expected To?
Happens all the time.
If you earned the income, you still need to report it.
The form doesnโt create the tax, it just reports it.
Wrapping It All Up
Dealing with 1099s isnโt glamorous, and itโs definitely not the highlight of anyoneโs year. But understanding which forms apply to you, and why, can save you headaches, notices, and surprise taxes down the road.
The bottom line:
Make a checklist of expected forms
Gather every 1099 you receive
Provide all copies to your accountant
Ask for copies if anythingโs missing
Keep great records (future you will be grateful)
And if all of this still feels overwhelming?
You donโt have to do it alone. We can help you sort through your forms, avoid mistakes, and file confidently.
If youโd like an extra set of eyes or guidance along the way, weโre here to support you!
Youโve got this. With a little preparation, tax season doesnโt have to feel like a puzzle with missing pieces.
TL;DR If you get a 1099, it means the IRS did too, so it's important to make sure itโs included on your tax return. The most common ones for individuals are 1099-INT, 1099-DIV, 1099-B, 1099-R, 1099-SSA, 1099-G, 1099-MISC/NEC, 1099-K, 1099-S, 1099-Q, and 1099-SA. Gather them, stay organized, and ensure they are included on your tax return. Youโll breeze through tax season like a pro.
Disclaimer: The information provided in this blog is for educational purposes only and does not constitute financial, legal, or tax advice. Reach out to The Freelance CFO team with any questions regarding specific financial concerns, or seek the services of a qualified adviser.
