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Taxes can be hard enough when there’s only a few forms involved—but start adding in side hustles, investments, freelance gigs and suddenly your taxes just got a whole lot more complicated. This guide is here to help. If you’ve received any kind of 1099 form in the past year, keep reading for details on what it means, if it’s taxable income and how to report it on your taxes.
For freelancers, gig workers and independent contractors, we'll cover the following:
Let's get right to it, shall we?
Although there are many different kinds of 1099 forms, these forms all are types of information forms. What does that mean? Essentially, they let the IRS know about what taxable income you earned throughout the year.
Most common among them is the Form 1099-NEC, which is provided to self-employed workers such as gig workers and independent contractors. If you earned more than $600 for a company you’re not employed for on a full-time basis, you should receive a 1099-NEC form from them at the end of the year.
If you work for a gig platform, such as Doordash, Uber, Lyft, Taskrabbit or other apps, you’ll receive a 1099-NEC form from them (if you earn more than $600 in a year) because you are not employed by the company as a full-time employee (even if you work “full-time” hours using the app).
Essentially, the Form 1099-NEC is the “W2” form for non-employees. If you are on a company’s payroll—working as a full-time employee—you’ll receive a W2 form at the end of the year that outlines your salary, wages and tips. If you receive a 1099, then you generally are not considered a full-time employee.
You’ll receive as many 1099 and W2 forms as companies you have worked for in the past year. For example, if you made $1,200 on Doordash, $3,400 with Uber and also worked a full-time job, you’ll likely receive two 1099s (one from Doordash and one from Uber), as well as a W2 from your employer.
A W9 form is a form that you (the contractor) provides to the business you’re providing that gives your employer your legal name, address and taxpayer identification information so they can provide a 1099 to both you and the IRS at the end of the year.
Typically, companies will ask for a W9 when you begin working with them. If you’re a freelancer, you should remember to complete a W9 before providing services to a company.
A 1099 form is used to report to the IRS the amount of income you’ve made from a given organization or company in a tax year. Depending on what kind of income you’ve received—i.e. from freelancing, as with a 1099-NEC form or a 1099-INT, if you received interest from a bank account or other financial institution—you’ll report this differently on your taxes.
In general, anyone who receives income from a source other than a regular, full-time employer may receive a 1099 form at the end of the year. Income sources that are covered by various 1099 forms include income from:
For independent contractors, gig workers and freelancers, the most common 1099 form is the 1099-NEC form (previously the 1099-MISC form).
However, you might also get a 1099-MISC form (now used for truly miscellaneous income, such as prize winnings or rental income) or a 1099-K form (from platforms like Venmo, Stripe, Paypal, etc. if you accept payments through those platforms).
There’s many different types of 1099 forms you might run into. While some of them are more common for freelancers and independent contractors than others, here’s a quick breakdown of all the different types of 1099 forms.
If your mortgage lender canceled some or all of your mortgage, or you made a short sale of your home, you might receive a Form 1099-A. The IRS generally considers canceled debt taxable income, so make sure you prepare for taxes if you have a debt canceled.
Tax forms 1099-B typically result after a capital gain (or loss) from a brokerage or barter exchange. In plain English—if you sold securities you owned like stocks or similar, you might get one of these. They’ll typically detail the gains (and/or losses) of each investment, as well as the dates you bought and sold them.
Similarly to Form 1099-A, the 1099-C reports the amount of debt forgiven from other sources, such as from a credit card issuer or another lender. If you’ve had debt forgiven or settled, the amount forgiven is generally taxable income.
An important note about student loan forgiveness: under the American Rescue Plan Act (ARPA), student loan debt that is forgiven between 2021 and 2025 is not considered federally taxable income. However, you may owe state taxes on that forgiven debt, depending on where you live. Most states’ tax laws align with federal tax law, but a few—most notably, California, Minnesota, North Carolina and Wisconsin—may tax student loan forgiveness.
If you received cash, stock or other income or property from a company you hold shares in that was acquired or otherwise went through a major change in capital structure, you will likely receive a 1099-CAP form to report the earnings from this.
The 1099-DIV form is one of the most common 1099 forms for all taxpayers, not just freelancers and gig workers. This form reports any dividends you received on investments. (This doesn’t include dividends or interest from banks or credit unions, that’s reported on 1099-INT forms instead.)
Another common 1099 form: the 1099-G form reports money received from the government. This includes unemployment payments, tax refunds or credits, grants and PhD stipends from public universities and other forms of governmental payment. These can come from local, state or federal government sources.
Similar to the 1099-DIV form, the 1099-INT form reports any interest you’ve earned from bank accounts or other financial institutions.
This is another very common 1099 form for freelancers and small business owners. The 1099-K form reports income received from clients or customers through third-party payment sources such as Venmo, Paypal, or Stripe. If you received more than $600 of client payments or customer purchases through payment platforms like these, expect to receive a 1099-K.
The 1099-LTC form reports any long-term care insurance benefits paid out during the year, as well as benefits from similar plans such as life insurance policies or similar.
Prior to 2020, this was the go-to income reporting form for freelancers and gig workers, which has since been replaced by the 1099-NEC form. Now, it’s just a catch-all for truly miscellaneous income such as prize money or rental income.
Now the most common income reporting form for freelancers, gig workers, self-employed independent contractors, the 1099-NEC (Non-Employee Compensation) form reports income companies pay to contractors or workers who complete work for them on a part-time basis or as non-employees.
Even if you work for a gig app such as Doordash or Lyft 40+ hours a week, you’re still considered an independent contractor and will receive a 1099-NEC form.
If you bought bonds, notes or other investments that have increased in value between when you purchased them and when they’ve matured, you might receive a 1099-OID form for the difference.
For co-op members who received at least $10 in patronage dividends, a 1099-PATR form will report this income.
If you, your child or your child’s school receives money from a 529 (or similar college tuition savings account) plan, you’ll receive a 1099-Q form. Don’t worry, though—when these funds are used for qualified education expenses, such as college tuition, they’re not taxable. As a result, these forms are generally just for your records.
Anyone who received payments or distributions from retirement plans, pensions, IRAs or similar retirement income sources, you might receive a 1099-R. Of course, a lot of retirement plans have tax advantages, so you might not actually owe taxes on all of the income reported here.
If you are responsible for closing a sale or exchange of a home, commercial property or other real estate, or even a plot of land, the 1099-S form reports the proceeds of the sale. Of course, not all real estate sale proceeds are completely taxable, so make sure you understand what tax implications this sale has.
If you took distributions from an HSA (health savings account), or other medical savings or Medicare Advantage account, you’ll receive a 1099-SA form to report the amount you took from those accounts. If you used these funds for qualifying health expenses, this isn’t considered taxable, so again, just keep these forms for your records.
Filing taxes with a 1099 form is pretty straightforward.
In short, you’ll want to gather all your 1099-forms and any other forms that report income from other sources (such as a W2 if you are also a full-time employee somewhere).
Simply provide your accountant with all of your 1099 forms and other income and tax information. You’ll also want to provide your accountant with any tax deductions you’d like to take for them to report as well.
All tax deductions need to be carefully recorded throughout the year, so if you have qualifying business mileage or expenses, make sure to keep careful record of it and save all your receipts. This will help your accountant accurately report deductions for you as well as keep you IRS-compliant in the event of an audit.
Input your total earnings from Box 7 of your 1099 form to the software when prompted. You may have to calculate totals from multiple 1099 forms if you freelance or do gig work for multiple platforms.
You’ll use a Schedule C form to actually file your taxes (as opposed to forms like the 1099 form, which is simply used to report income). On the Schedule C form, you’ll enter your gross income from 1099 forms into Part 1, Line 1. There will also be space for you to report other income, deductions and other relevant information from other tax forms you may receive.
For a step-by-step walkthrough of how to report income from a 1099 form and file taxes as a 1099 employee, check out our complete guide to filing taxes with a 1099 form.
It depends on which 1099 form you’ve received. While most income you’ve received—whether it comes from a full-time employer (W2 form), a part-time freelancing gig (1099-NEC form) or prize money (a 1099-MISC form)—is taxable, not all 1099-forms are taxable income.
In general, income reported from these forms are not taxable:
If you earned more than $600 from a single source and didn’t get a 1099-form, don’t panic. It’s possible that your form is delayed in the mail, or otherwise misplaced.
However, do not assume that if you don’t get a 1099-form that your income is not taxable. You must report all income you make on your tax return to the IRS, or else you’re technically committing tax fraud—and you can get in huge trouble if the IRS notices or audits you. (Keep in mind, too, that the IRS can audit you for tax returns filed up to six years ago.)
When taxes feel complicated, Everlance is here to help, every day of the year.
With Everlance, you can track mileage and expenses automatically, therefore getting more deductions on your taxes and saving more on your taxes, just by automatically recording deductions throughout the year. Think your deductions won’t add up to much? The average gig worker saves $6,000+ on taxes each year, just by using Everlance.
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We help people save time and money. At Everlance, we're on a mission to empower mobile workers and businesses. That sometimes leads us to generalize tax information. Everlance team members are not certified tax professionals. If you need help with your specific tax situation, please reach out to your tax advisor.
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