Whether you run a small business, own a large company or work for someone else, there’s no getting around taxes. Virtually everyone who earns a living has to pay income taxes in one way or another, and this means even self-employed professionals need to file a tax return.
While employees generally file Form 1040 with the Internal Revenue Service (IRS), self-employed individuals and certain types of businesses use a different form. In the case of self-employment, works for hire and certain other forms of income, Form 1099 is used instead.
Different Types of 1099 Forms
Form 1099 is the general name used to identify IRS forms that are used to report self-employment and work-for-hire service income, but there are several different 1099 forms. For instance, Form 1099-MISC is provided to a freelancer who has completed a piece of one-off work for a business, and a separate 1099-MISC is provided by each business for which the freelancer completed work within a tax year.
Form 1099 for eCommerce may be called Form 1099-K. The reason this is the specific Form 1099 for eCommerce is because 1099-K has to do with online payments. eCommerce business owners will report income from gift cards on this form as well. Effortless 1099s for your eCommerce venture! Explore our tailored solutions for streamlined Form 1099 for eCommerce processing. Visit now to simplify tax compliance.
Self-Reporting Your Income
It’s important to note that self-employment income is generally self-reported, and you may need to make tax payments once per quarter instead of simply filing a tax return at the end of the year. It would be a good idea to work directly with a tax professional like a CPA to ensure you understand your tax obligations.
Failure to report income can lead to big problems if the IRS finds out. Criminal charges may even result from failure to report or pay taxes owed. This is why it’s important to know your rights and obligations, and a tax professional can help you do this.
Disclaimer: The above is not tax advice. Always consult with a tax professional if you have questions or concerns about taxes.
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