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Forms Specifics

1099-K

According to the IRS, you should receive Form 1099-K, Payment Card and Third Party Network Transactions, by January 31st if, in the prior calendar year, you received payments:

  • from payment card transactions (e.g., debit, credit or stored-value cards), and/or
  • in settlement of third-party payment network transactions above the minimum reporting thresholds of –
    • gross payments that exceed $20,000, AND
    • more than 200 such transactions

Commonly, self-employed individuals such as Uber/Lyft drivers will receive a Form 1099-K.

You can enter your information from the 1099-K in the Business Income (Schedule C) section of your return.

1099-MISC:

According to the IRS, Schedule C (Form 1040) is used to report income or (loss) from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity.  Whether the income is received in the form of cash or check, independent contractors in business for themselves should receive a 1099-Misc form from every business from which they receive at least $600 throughout the tax year.     

In Credit Karma Tax, 1099-Misc income can be reported by clicking in the Business Income-Schedule C area:

1099 MISC income can also be manually entered in the Less Common Income area:

While using the Schedule C format allows the member the opportunity to enter any applicable expenses or costs of doing business, entering the information directly in the 1099-Misc income area is less complex and many types of freelance or contract jobs have no expenses associated with them.   

Short and Long Term Gains:

The IRS categorizes capital gains based on the amount of time that the taxpayer held the investment.  

  • Short term gains are those gains that result from holding an investment property for one year or less.  
  • Long term gains result from holding an investment for at least one year and one day.  

Please note that these periods of time are calculated within the Credit Karma Tax software based on the info entered for Date Acquired and Date Sold.  

 

SSA-1099:

There are plenty of taxpayers who will not owe taxes on their Social Security benefits, depending on their income level.  That said, some people who get Social Security must pay federal income taxes on their benefits. But, no one pays taxes on more than 85 percent of their Social Security benefits.

 

You will need to pay taxes on your benefits if:

 

  • You file a federal tax return as an individual and your combined income exceeds $25,000.
  • You file a joint return and you and your spouse have combined income of more than $32,000.
  • You are married and file a separate return.

1099-S:

A taxpayer receives this form upon receiving proceeds from the completion of the sale or disposition of real estate.  

Generally the sale of real estate is a reportable transaction unless the transaction falls under certain exceptions; however, even then it could make sense for the taxpayer to report it.  

For most taxpayers, recognizing a gain on the sale of a principal residence is an item that can be excluded from gross income.  For joint filers, the exclusion applies for gains up to $500,000.  For all other filers the exclusion extends to $250,000.   

Form 1098:


You can use form 1098 to report mortgage interest of $600 or more paid by you during the year.

For federal income tax purposes, a mortgage is a loan secured by your main home or second home. This includes:

  • First mortgages
  • Second mortgages
  • Home equity loans
  • Refinanced mortgages.

A home must provide basic living accommodations including sleeping space, toilet, and cooking facilities. Some examples of a home are a:

  • House
  • Condominium
  • Cooperative
  • Mobile Home
  • Boat
  • Yurt
  • Yacht

There is a catch: while you may claim your qualified home mortgage interest on your federal income tax return, you might not have a form 1098. The IRS only requires a lender to issue a form 1098 if the property that secures your mortgage is considered real property.

Real property is defined as, "land and generally anything built on it, growing on it, or attached to the land." This means that if a mortgage is not secured by real property, the lender is not required to file form 1098.

Form 1099-G:

Federal, state, or local governments send you this form if you any of the following types of payments:

  • Unemployment compensation
  • State or local income tax refunds, credits, or offsets
  • Reemployment trade adjustment assistance (RTAA) payments
  • Taxable grants
  • Agricultural payments

1099-OID:

You'll get Form 1099-OID (Original Issue Discount) when you purchase a bond or note for an amount less than face value. The OID is the difference between the bond's stated redemption price (usually its face value) and its issue price (generally the amount the bond or note was first sold by the issuer).

The OID is taxable interest over the life of the bond, which gets reported every year you hold the bond, even if you don't actually receive the interest.

Child and Dependent Care Credit:

You may be able to claim the Child and Dependent Care Credit on your federal tax return if , during the last year, you paid someone to care for your:

  • Child
  • Spouse
  • Dependent

The care must have been provided for one or more qualifying persons. A qualifying person is:

  • Your dependent child age 12 or younger
  • Your spouse
  • Other individuals who are physically or mentally incapable of self-care

The care must have been provided so you and your spouse, if you are married filing jointly, could work or look for work.

You, and your spouse if you file jointly, must have earned income from:

  • Wages
  • Salaries
  • Tips
  • All taxable employee compensation
  • Net earnings from self-employment.

Additionally, one spouse may be considered as having earned income if they were a full-time student or were physically or mentally unable to care for themselves.

The payments for care cannot be paid to:

  • Your spouse
  • The parent of your qualifying person
  • Your dependents
  • Your child who will not be age 19 or older by the end of the year

For more information on the Child and Dependent Care Credit, see Publication 503, Child and Dependent Care Expenses. You may download these free publications from http://www.irs.gov or order them by calling 800-TAX-FORM (800-829-3676). 

Schedule C (Form 1040):

Use this schedule to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:

  • Your primary purpose for engaging in the activity is for income or profit
  • You are involved in the activity with continuity and regularity

For example, a sporadic activity or a hobby does not qualify as a business. To report income from a non-business activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21.

Also use Schedule C to report:

  • Wages and expenses you had as a statutory employee
  • Income and deductions of certain qualified joint ventures
  • Some income shown on Form 1099-MISC


SSA-1099:

Form SSA-1099 reports Social Security benefits you received from the Social Security Administration (SSA). Some examples are:

  • Retirement benefits
  • Disability benefits
  • Survivor benefits.

Social Security benefits may or may not be taxable for a given year. Social Security retirement benefits are often not taxable at either the federal or state level.  

Whether or not your Social Security income is taxable depends on your total income. If your only income is Social Security, you probably don't make enough money to be required to file a federal tax return.

For those with additional sources of income, the key figure is the Modified Adjusted Gross Income (MAGI). The MAGI includes half of your Social Security, plus other sources of income. Once your MAGI exceeds the base amount for your filing status, part of your Social Security income becomes taxable.

Form 1099-B:

You will receive this form if you:

  • Sold stocks, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc.
  • Received cash, stock, or other property from a corporation that has had its stock acquired
  • Exchanged property or services through a barter exchange. 

Tuition Fees:

You may be able to deduct expenses on higher education paid during the year for:

  • Yourself
  • Your spouse
  • Your dependents.

You can't claim this deduction if:

  • Your filing married filing separately
  • Another person can claim an exemption for you as a dependent
  • Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return).
  • You or your spouse were a nonresident alien for any part of 2016 and the nonresident alien didn't elect to be treated as a resident alien for tax purposes.

You can usually claim the tuition and fees deduction if the following requirements are met.  

  • You pay qualified education expenses of higher education.
  • You pay the education expenses for an eligible student.
  • The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return.

The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000!

Form 1099-SA:

When you use the funds from a Health Savings Account (HSA), or a medical savings account (MSA), the institution that administers the account must report all distributions on Form 1099-SA.

Only certain individuals are eligible to contribute to an HSA or MSA:

 

  • You must be covered under a High Deductible Health Plan (HDHP)
  • You cannot have a non-HDHP health plan
  • You cannot be enrolled in Medicare
  • You cannot be eligible to be claimed as a dependent on another person’s return.

Form 1099-MISC

You will receive this form if you were paid at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest or a minimum of $600 in:

  • Rent
  • Services performed by someone who is not your employee
  • Prizes and awards
  • Other income payments
  • Medical and health care payments
  • Crop insurance proceeds
  • Cash payments for fish or any other aquatic life
  • Cash paid from a notional principal contract to an individual, partnership
  • Estate payments to an attorney; or any fishing boat proceeds

Form 1095-A:

This form is used to report certain information about individuals who enroll in a qualified health plan through the Health Insurance Marketplace.

 

This let’s people:

  • take the premium tax credit
  • reconcile the credit on their returns with advance payments of the premium tax credit (advance credit payments)
  • file an accurate tax return.



Form 1095-B:

Form 1095-B is used to report certain information about individuals who are covered by minimum essential coverage and are not liable for the individual shared responsibility payment.

 

Minimum essential coverage includes:

  • Government-sponsored programs
  • Eligible employer-sponsored plans
  • Individual market plans
  • Other coverage the Department of Health and Human Services designates as minimum essential coverage.

Form 1095-C:

Form 1095-C is used if an employer has more than 50 employees. It is filed and furnished to any employee of an ALE member who is a full-time employee for one or more months of the calendar. ALE Members must report that information for all twelve months of the calendar year for each employee. 

Form 1095-C is used:

  • To report information about each employee to the IRS and to the employee
  • In determining whether an ALE Member owes a payment under the employer shared responsibility provisions under section 4980H.
  • In determining the eligibility of employees for the premium tax credit. 

Form 1099-R:

You will receive this form if you have made a designated distribution or are treated as having made a distribution of $10 or more from

  • Profit-sharing or retirement plans
  • Any individual retirement arrangements (IRAs)
  • Annuities, pensions, insurance contracts, survivor income benefit plans
  • Permanent and total disability payments under life insurance contracts
  • Charitable gift annuities, etc

Still have questions? Contact member support

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