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It's January, and time to get your 2011 1099 forms and instructions in order. This year, though, there's a new player in town: The new Form 1099-K.
The new form may increase confusion about 1099 forms and instructions. So here are some Frequently Asked Questions to help clarify what's required:
The IRS provides 1099 forms for taxpayers to report different types of miscellaneous taxable income. (It's not for wages, which should be reported on employees' W-2 forms.)
There are different 1099 forms for different types of income, for example:
A complete list of IRS 1099 forms (and instructions) can be found at the IRS website.
Form 1099-K is new this year. It's required for small businesses that sell more than $20,000 in goods or services through at least 200 transactions with any single payment processor, TheStreet.com reports. The new form allows the IRS to match a small business' tax filings with their sources of revenue, accountant Steven Aldrich of Outright.com tells TheStreet.
Here's how it works. Payment processors like Amazon, PayPal, banks, and credit-card companies must send out 1099-K forms to small-business merchants.
The 1099-K form will show a gross revenue number and a monthly breakdown of the processor's transactions, Aldrich says. The small business owner will need to subtract all expenses, and compare that number to what they will report on their taxes.
Form 1099-B must be mailed to recipients by Feb. 15, and reported to the IRS by Feb. 28, according to the IRS. In general, all other 1099 forms -- including the new Form 1099-K -- must be mailed to recipients by Jan. 31, and reported to the IRS by the end of February.
Tax forms can be accessed online at http://www.irs.gov. Small businesses should be receiving 1099-K forms from credit-processing companies by the end of January.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.