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1040 Forms vs. 1099 Forms — What's the Difference?

Edited by Tayyaba Rehman — By Fiza Rafique — Published on November 29, 2023
1040 Forms are for individuals to report their annual income; 1099 Forms are given to non-employees showing income earned from a specific payer.
1040 Forms vs. 1099 Forms — What's the Difference?

Difference Between 1040 Forms and 1099 Forms

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Key Differences

1040 Forms are used by individual taxpayers in the U.S. to report their annual income to the Internal Revenue Service (IRS). It's the primary form that personal taxpayers use to file their federal income tax returns, detailing their earnings and specifying deductions and credits. On the other hand, 1099 Forms are provided to individuals by payers, such as companies or individuals, as a record of non-wage income earned during the year.
Fiza Rafique
Nov 29, 2023
While 1040 Forms encompass various types of income, adjustments, deductions, and credits, providing a comprehensive view of an individual's financial picture, 1099 Forms are more specific. They are used to report various types of non-wage income like earnings from freelance work, interest, or dividends. Essentially, while the 1040 Forms tell the IRS about an individual's overall financial picture, the 1099 Forms indicate specific streams of income from non-traditional employment or investments.
Fiza Rafique
Nov 29, 2023
It's important to note that receiving a 1099 Form doesn't necessarily mean one owes taxes on that income. When filing taxes, individuals will include the information from their 1099 Forms on their 1040 Forms. Then, the total income from various sources, along with deductions and credits, will determine any tax owed.
Fiza Rafique
Nov 29, 2023
Furthermore, while the 1040 Forms are submitted by taxpayers to the IRS, the 1099 Forms are provided to taxpayers by those who've paid them. Moreover, the payer also sends a copy of the 1099 to the IRS. This way, the IRS can match the reported income on the 1040 with the amounts on the 1099 Forms to ensure accurate tax reporting.
Fiza Rafique
Nov 29, 2023
In summation, 1040 Forms and 1099 Forms are integral components of the U.S. tax system. The 1040 provides a holistic view of an individual's income and tax situation, whereas the 1099 captures specific non-wage income sources.
Fiza Rafique
Nov 29, 2023
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Comparison Chart

Purpose

Report personal annual income to IRS
Report specific non-wage income to the recipient
Fiza Rafique
Nov 29, 2023

Issued By

Individual taxpayer
Payer (e.g., company, individual)
Fiza Rafique
Nov 29, 2023

Income Types Covered

Various (wages, interest, dividends, etc.)
Non-wage income (e.g., freelance, interest)
Fiza Rafique
Nov 29, 2023

Submission

Submitted by individual to IRS
Given to taxpayer by payer; copy sent to IRS
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Nov 29, 2023

Associated Tax Payment

Determines tax owed based on total income and deductions
Indicates income, not necessarily tax owed
Fiza Rafique
Nov 29, 2023

Compare with Definitions

1040 Forms

Submitted annually to the IRS.
It's tax season, so I need to complete my 1040 Forms.
Fiza Rafique
Oct 15, 2023

1099 Forms

Reports non-wage income to recipients.
As a freelancer, she received several 1099 Forms.
Fiza Rafique
Oct 15, 2023

1040 Forms

Used to report various types of income.
On his 1040 Forms, he included his wages and interest income.
Fiza Rafique
Oct 15, 2023

1099 Forms

Used for various income, like freelance or dividends.
Her stock dividends were listed on a 1099 Forms.
Fiza Rafique
Oct 15, 2023

1040 Forms

Primary personal income tax return form.
She filled out her 1040 Forms to report her yearly earnings.
Fiza Rafique
Oct 15, 2023

1099 Forms

Not a tax bill but an income report.
Receiving a 1099 Forms doesn't mean he owes that amount in taxes.
Fiza Rafique
Oct 15, 2023

1040 Forms

Considers deductions and credits.
After accounting for deductions on her 1040 Forms, she received a refund.
Fiza Rafique
Oct 15, 2023

1099 Forms

A copy is also sent to the IRS.
The company sends 1099 Forms to both the contractor and the IRS.
Fiza Rafique
Oct 15, 2023

1040 Forms

Can be supplemented with additional schedules.
Given his rental income, he attached Schedule E to his 1040 Forms.
Fiza Rafique
Oct 15, 2023

1099 Forms

Issued by payers of specific income types.
The bank sent him a 1099 Forms for his savings account interest.
Fiza Rafique
Oct 15, 2023

Common Curiosities

Can I file my taxes without a 1040 Form?

No, the 1040 Forms is the standard personal income tax return form.
Fiza Rafique
Nov 29, 2023

What is the primary use of 1040 Forms?

1040 Forms are used to report an individual's annual income to the IRS.
Fiza Rafique
Nov 29, 2023

Do I always owe taxes if I get a 1099 Forms?

Not necessarily; the 1099 Forms reports income, but deductions may offset taxes owed.
Fiza Rafique
Nov 29, 2023

Do I need to attach schedules to my 1040 Forms?

Depending on your income sources, you might need to attach additional schedules.
Fiza Rafique
Nov 29, 2023

Where do I report income from a 1099 Forms on my tax return?

Income from 1099 Forms is reported on your 1040 Forms in the appropriate sections.
Fiza Rafique
Nov 29, 2023

Is there a penalty for not filing 1040 Forms?

Yes, there can be penalties and interest for not filing or late filing.
Fiza Rafique
Nov 29, 2023

How many types of 1099 Forms are there?

There are various 1099 Forms types, like 1099-MISC, 1099-INT, based on income type.
Fiza Rafique
Nov 29, 2023

Why would someone receive a 1099 Forms?

1099 Forms are received when one earns non-wage income, like from freelancing or investments.
Fiza Rafique
Nov 29, 2023

Who sends out 1099 Forms?

Payers of specific income types, like companies or individuals, issue 1099 Forms.
Fiza Rafique
Nov 29, 2023

If I make an error on my 1040 Forms, what should I do?

You can file an amended return using Form 1040-X.
Fiza Rafique
Nov 29, 2023

How do I know which 1040 Form to use (e.g., 1040EZ, 1040A)?

The complexity of your finances determines the form. However, as of 2018 tax year, only the standard 1040 is used.
Fiza Rafique
Nov 29, 2023

Is it possible to e-file 1040 Forms?

Yes, many individuals e-file their 1040 Forms for convenience.
Fiza Rafique
Nov 29, 2023

Are all 1099 Forms income subject to self-employment taxes?

Not all. While some 1099 income may be, others, like dividends, aren't.
Fiza Rafique
Nov 29, 2023

Why might I get multiple 1099 Forms?

If you earned income from multiple sources or payers, you'd receive multiple 1099 Forms.
Fiza Rafique
Nov 29, 2023

Do I need to send the 1099 Forms to the IRS?

No, the issuer sends a copy to both you and the IRS.
Fiza Rafique
Nov 29, 2023

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Author Spotlight

Written by
Fiza Rafique
Fiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
Tayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.

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