Reporting Freelance Income With a 1099 Form

a fountain pen sitting on a desk.

A 1099 is an Internal Revenue Service (IRS) form known as the "miscellaneous income" form. It is sent to a contractor, freelancer, or another person who has received income in the past tax year. It does not apply to a regular salary paid out on a consistent basis where benefits and taxes are withheld.

1099 In Depth for Freelance Writers

Since the 1099 is a US IRS form, this information applies only to US-based freelancers. Freelance writers (and other independent contractors) will receive this form from those who have paid them for work in the previous tax year. It is required to be sent to both the contractor/freelancer and the IRS. It is not required if the amount paid over the past year was less than $600. This form is not applicable to those who are regular employees.

The 1099 is required to be sent to the contractor/freelancer and postmarked by Jan. 31 of each year. It is a summary of total income paid to that contractor in the year previous to that January. The payer must send to the IRS by the end of February a summary of all the 1099 forms they sent out. The IRS may double-check this against the income reported by the contractor/freelancer.

Freelance writers will use the 1099 as their main way of reporting income to the IRS. The freelancer will refer to both their records and their 1099s to add up income when preparing their taxes because amounts of less than $600 must be reported, even though no 1099 was required. It is tempting to skip reporting the income less than $600 for which no 1099 exists, but you face penalties if caught.

When the Freelance Writer Must Issue 1099s

If you are a freelance writer who has paid someone else in the course of your business for any reason, you may have to issue that person a 1099. So, for example, a freelance writer may need to issue a 1099 to any editor they paid over the course of a calendar year (if they paid that editor more than $600). This would also apply to any work subcontracted to another writer. Perhaps you hired someone to organize your files or create some infographics to accompany your work. These are all instances requiring the 1099.

This is another good reason to treat your freelance writing like a business and to keep excellent bookkeeping records

In addition, you'll need to send a summary of all 1099s you've issued to the IRS.This may seem intimidating to new freelance writers; it may be best to procure a tax professional or accountant to take care of all this for you. However, know that 1099 forms are available from the IRS, and instructions are included for you.

There are also websites that provide the service for less than a tax professional would charge. It's essential to have the tax identification or Social Security numbers and mailing addresses for any people you pay throughout the year.

Disclaimer: The writer is not a tax professional or attorney. All information here is not to be construed as tax advice or legal direction. Freelancers should consult their own financial advisers.