If you have anyone doing work around your home, it’s possible they may be considered household employees. Consequently, you’ll have some additional responsibilities at tax time, including filing a Schedule H. Schedule H reports household employment taxes to the IRS. Here’s an overview of Schedule H.
What is Schedule H?
Schedule H, Household Employment Taxes, is a form that household employers use to report household employment taxes to the IRS. So, it’s important to understand which employees qualify as a household employee and not independent contractors. If a person comes to your home to perform work one time or occasionally, they are likely independent contractors. These are typically plumbers, occasional babysitters, roofers, and others who run their own businesses. On the other hand, if your employee is someone who you give regular tasks to, they are likely considered a household employee. Housekeepers, live-in nannies, drivers, caretakers and regular babysitters are examples. Keep in mind, however, that you should not count wages paid to your spouse, parent, children under the age of 21, or any employee under the age of 18.
How to File Schedule H
Schedule H should be filed with Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1041. However, if you are not filing any of these returns, you can file Schedule H alone. To file Schedule H, you’ll need the following information:
You must file Form W-2 for each household employee that you paid $2,600 or more in wages in 2023. The amount increases to $2,700 in 2024. In addition, you’ll need to send Form W-2 with Copy A of Form W-2 to the Social Security Administration (SSA).
Don’t forget to pay federal unemployment tax if you paid $1,000 or more in wages in any calendar quarter in 2022. Each household employee is required to pay 6.2% for social security and 1.45% for Medicare. You, as an employer, hold the responsibility of matching these figures as well as FUTA taxes. This figure varies from 0.6% to 6%. However, the amount can be reduced if you pay state unemployment insurance (SUI or SUTA tax).
Tax Help for Those with Household Employees
There are quite a few responsibilities that come with having household employees. Most important, these can include filing requirements and tax payments that need to be made. It’s important you understand these responsibilities for both your sake and your employee’s. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers.
Form 1099 is more common than ever with many taxpayers turning to side hustles for extra income. Now that we have a good understanding of what types of 1099s there are and what they are used for, we can review some of the most frequently asked questions about them. Here are some of the most frequently asked questions about IRS Form 1099.
What if I mistakenly received a 1099?
If you received a 1099 by mistake, or if the amounts reported are incorrect, you should report the error to the payer immediately. If you’re lucky, they’ll be able to correct the error before sending a copy to the IRS. On the other hand, if they already have sent the 1099 to the IRS, you’ll need to request they send a corrected form. Spotting an error quickly will give you the best chance at avoiding further complications. That said, knowing which 1099s to expect in advance, and knowing the expected amount shown on them, can help you catch mistakes early on.
Do I need to report every 1099 I receive?
Every 1099 you receive should be considered in your tax return. This is because the IRS also receives a copy of each of your 1099s as well. For example, you must include all income earned through 1099-NEC, 1099-MISC, 1099-K, 1099-DIV, and others that report income. However, let’s say you receive 1099-S after the sale of your home. Remember, if the property was your primary residence for two of the five years before the sale, then up to $250,000 of the profit is exempt from taxes. This amount increases to $500,000 for married couples filing jointly. In this scenario, the transaction is not reportable. However, you will need to submit a written certification stating why you are exempt from capital gains on the transaction. Be sure to always consult with a knowledgeable tax professional about your reporting requirements.
What’s the difference between a 1099 and a W-2?
A 1099 form reports any income earned outside of regular employer income. It is commonly received by independent contractors, gig workers, and investors. A W-2 reports wages earned through an employer for the year. The biggest difference between the two forms is that the W-2 shows any taxes withheld from your wages, while the 1099 does not. That doesn’t mean you’re off the hook though. If you earn income through 1099s, you should be making estimated tax payments each quarter since the IRS requires taxes to be paid as income is earned. Failing to pay estimated taxes on 1099 income can result in penalties, interest and surprise tax bills.
What changes are coming for the 1099-K?
Previously, taxpayers only received a 1099-K, Payment Card and Third-Party Network Transactions, if they received over $20,000 in aggregate payments over 200 transactions through third-party payment networks, like Venmo or PayPal. For the 2024 tax year, the 1099-K reporting threshold was reduced down to just $5,000 in aggregate payments. Tax year 2025 will see this amount drop to $600. The IRS is expecting many more taxpayers to receive a 1099-K by the January 31st deadline, but with some hiccups along the way. For example, you may mistakenly receive a 1099-K for non-business transactions. Common scenarios may be collecting rent money from a roommate or receiving a friend’s portion of a dinner bill. In this case, it is up to you to contact the filer to request a corrected form.
What if I have more questions about 1099s?
We can’t stress enough just how complex 1099s can be. There are dozens of 1099 types and each with their own set of rules. Therefore, it’s best to consult a tax professional for insight on your own personal tax situation. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
Now that we know the basics of IRS Form 1099, we can take a closer look at the different types of 1099s you can receive. Remember, if you received any income outside your employer, you might receive a 1099. While most types of Form 1099 are not commonly received, there are a handful that you are likely to come across at some point. Here’s an overview of the different types of Form 1099.
1099-MISC: Miscellaneous Income
The 1099-MISC is an IRS form used to report $600 or more in miscellaneous income that you received during the tax year. Some examples of payments that require a 1099-MISC form include rent, prizes and awards, medical and health care payments, crop insurance proceeds, attorney payments, and more.
1099-NEC: Nonemployee Compensation
The 1099-NEC form is used to report non-employee compensation, including independent contractors, freelancers, sole proprietors, and self-employed individuals. If you received $600 or more in non-employee compensation during the tax year, you should receive a 1099-NEC. This form is used to report payments made for services rendered. These might include consulting fees, professional services, and other types of compensation.
1099-INT: Interest Income
Form 1099-INT is used to report any interest income you earned during the year. If you earned more than $10 in interest income, the financial institution is required to disburse a Form 1099-INT. The form will go both to you and the IRS. Interest income can include any earned from high-yield savings accounts, U.S. savings bonds, municipal bonds, and more.
1099-DIV: Dividends and Distributions
Form 1099-DIV is used to report dividends and distributions that are paid to you during the tax year, as well as any federal income tax withheld. This can include ordinary dividends, which are paid out of a company’s earnings and profits, qualified dividends, capital gain distributions, and non-dividend distributions. It does not include any dividends that you accrued through tax-sheltered retirement accounts. You will typically receive a 1099-INT if you received at least $10 in dividend income.
1099-K: Payment Card and Third-Party Network Transactions
Form 1099-K is meant to track payments made through third-party networks, such as PayPal or Venmo. For the 2023 tax year, you would receive a 1099-K if you earned at least $20,000 in 200 payments. 1099-Ks report gross income. Therefore, you should be sure to deduct any expenses you had to use third-party payment networks to receive payments.
Other Common Types of 1099
1099-B, Proceeds from Broker and Barter Exchange Transactions
This form reports the sale of stock, bonds, and other securities through a broker, as well as barter exchange transactions. These transactions must be reported even if you had a loss or broke even.
1099-G, Certain Government Payments
This reports payments you received from government agencies, including unemployment, tax refunds, taxable grants, and more.
1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
This reports distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions. You should consult with a tax professional about whether you will owe tax on these distributions.
1099-S, Proceeds from Real Estate Transactions
1099-S reports the sale or exchange of real estate. If the property was your primary residence for two of the five years before the sale, then up to $250,000 of the profit is exempt from taxes. This amount increases to $500,000 for married couples filing jointly.
1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
This form reports distributions made from a health savings account (HSA), Archer Medical Savings Account (Archer MSA), or a Medicare Advantage Medical Savings Account (MA MSA). Distributions can be taxable if they were used to pay for qualified medical expenses, if they were not rolled over in some cases, if excess contributions were made, and other scenarios. You should consult with a tax professional about whether you will owe tax on these distributions.
Less Common Types of 1099
1099-A, Acquisition or Abandonment of Secured Property
1099-A reports foreclosures on properties. You may be liable for capital gains tax and income tax for any unpaid foreclosed mortgage balances.
1099-C, Cancellation of Debt
This form reports discharged, forgiven, or canceled debt. This can include your property foreclosure or forgiven credit card debt but typically excludes debt discharged in bankruptcy. You will need to claim the amount reported on your 1099-C as taxable income.
1099-CAP, Changes in Corporate Control and Capital Structure
Form 1099-CAP reports the amount of cash, stock, or property received after a significant change in the company’s control or capital structure.
1099-H, Health Coverage Tax Credit (HCTC) Advance Payments
This reports any advance payments of qualified health insurance payments you received. If you qualify for trade adjustment assistance (TAA), alternative TAA (ATAA), reemployment TAA (RTAA), or Pension Benefit Guaranty Corporation (PBGC), you might see this form.
1099-LTC, Long Term Care and Accelerated Death Benefits
Form 1099-LTC reports payments made under a long-term care insurance contract. This includes accelerated death benefits, or benefits received before death because the policyholder has been deemed terminally ill by a doctor. The amount shown on the 1099-LTC are generally tax-free but are required to be reported to the IRS.
1099-LS, Reportable Life Insurance Sale
This form reports the amount paid to you from a life insurance sale.
1099-OID, Original Issue Discount
1099-OID reports $10 or more of income received when bonds, notes, or certificates of deposit (CDs) are sold at a discount from their maturity value.
1099-PATR, Taxable Distributions Received from Cooperatives
This reports at least $10 in patronage dividends and other distributions from a cooperative (co-op) in the prior year.
1099-Q, Payments from Qualified Education Programs
1099-Q reports total withdrawals from qualified tuition programs (QTPs) like 529 plans or Coverdell educational savings accounts. This amount may be taxable, depending on how the funds were used.
1099-QA, Distributions from ABLE Accounts
Form 1099-QA reports distributions from an Achieving a Better Life Experience (ABLE) Account for special needs individuals with a disability. These funds are not taxable if you used them to support a disabled individual.
1099-SB, Seller’s Investment in Life Insurance Contract
This reports the sale of a life insurance policy like the 1099-LS. The difference is that the original issuer of the policy files a 1099-SB after they receive the 1099-LS. You should consult with a tax professional if you receive either of these forms.
Tax Help for Those Who Receive 1099s
The types of Form 1099 and the accompanying filing requirements can quickly become very complicated. You should always consult with a tax professional if you are unsure about your tax filing requirements. Remember, even if you do not receive a 1099 for income earned, it’s still your responsibility to include it in your taxable income. Not doing so can be a major red flag to the IRS and can result in an audit. Optima Tax Relief has over a decade of experience helping taxpayers with tough tax situations.
Receiving a 1099 is becoming more and more common with the rise in small businesses, side hustles, and the desire for a second stream of income. With the additional income comes a different tax filing process. If you receive a 1099, it’s because you earned a certain amount of income from a non-employer and like most income, 1099 income is taxable. Here’s a breakdown of the basics of the IRS 1099 form.
What is a 1099?
IRS Form 1099 is actually a collection of tax forms, and not just one single form. If you receive these forms, it means that the sender paid you a certain amount of money, usually at least $600, in the previous year. These funds could be from income you received as an independent contractor, rental income, dividend payouts, and more. If you receive a 1099 form, so did the IRS, which means it’s your responsibility to report the income on your tax return.
Who receives a 1099?
There’s a long list of individuals who can receive a 1099. Among many other scenarios, you’ll likely receive a 1099 if you:
Are a freelancer or independent contractor
Received $600 or more for rent, prizes, awards, and other types of payment
Received $10 or more in royalties or broker payments
Received $20,000 or more via third-party apps like Venmo or PayPal
Received unemployment compensation
What are the most common types of 1099s?
We’ll break down each type of 1099 in our next post, but here are the most common ones:
1099-DIV: Dividends and Distributions
1099-G: Certain Government Payments
1099-INT: Interest Income
1099-K: Payment Card and Third-Party Network Transactions
1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.
What if I don’t receive a 1099 for income I earned?
1099s are usually sent out by January 31st each year, or February 15th for some. If you do not receive a 1099 for income worked, you are not off the hook for reporting this income to the IRS. You are still responsible for paying taxes on that income. If you are still waiting for a 1099 after the deadline, reach out to the payer responsible for sending it and request a copy be sent to you. Be sure to give yourself enough time to request and receive the 1099 copy to avoid submitting a late tax return.
Tax Help for Those Who Receive Form 1099
Overall, understanding the 1099 form is important for anyone who receives income from sources other than an employer. By properly reporting all income received on the form, individuals can avoid penalties and ensure that they pay the correct amount of taxes on their income. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
Did you know there are hundreds of IRS tax forms? Luckily, you’ll only need to know a handful of them if your tax situation is simple. However, because your tax situation can change year to year, it’s a good idea to learn about other common IRS tax forms you may not have used before. Here is a list of 50+ IRS tax forms you might need to file your taxes.
Form 1040 and Schedules
Form 1040, U.S. Individual Income Tax Return: used by U.S. taxpayers to file an annual income tax return
Form 1040-SR, U.S. Tax Return for Seniors: an optional alternative to using Form 1040 for taxpayers who are age 65 or older
Form 1040-X, Amended U.S. Individual Income Tax Return: used to amend or fix a submitted tax return
Form 1040-ES, Estimated Tax for Individuals: used to figure and pay your estimated tax
Schedule A, Itemized Deductions: used to figure your itemized deductions
Schedule B, Interest and Ordinary Dividends: used in some scenarios when you’ve earned taxable interest or dividends
Schedule C, Profit or Loss from Business (Sole Proprietorship): used to report income or losses from a business you operated as a sole proprietor
Schedule D, Capital Gains and Losses: used to report capital gains and losses for the year
Schedule E, Supplemental Income and Loss: used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in real estate mortgage investment conduits (REMICs)
Schedule EIC, Earned Income Credit: used to give the IRS information about your qualifying child(ren)
Schedule F, Profit or Loss From Farming: used to report farm income and expenses
Schedule H, Household Employment Taxes: used to report household employment taxes. Applies if you paid cash wages to a household employee and the wages were subject to social security, Medicare, or FUTA taxes, or if you withheld federal income tax
Schedule J, Income Averaging for Farmers and Fishermen: used to figure your income tax by averaging, over the previous 3 years, all or some of your taxable income from your farming or fishing business
Schedule R, Credit for the Elderly or the Disabled: used to figure the credit for the elderly or the disabled
Schedule SE, Self-Employment Tax: used to figure the tax due on net earnings from self-employment
Schedule 8812, Credits for Qualifying Children and Other Dependents: used to figure your child tax credits
Application Forms
Form SS-4, Application for Employer Identification Number: used to apply for an Employer Identification Number (EIN). An EIN is a nine-digit number assigned to sole proprietors, corporations, partnerships, estates, trusts and other entities for tax filing and reporting purposes
Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return: used to request an automatic extension of time to file a U.S. individual income tax return
Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns: used to request an automatic 6-month extension of time to file certain business income tax, information, and other returns.
Form W-7, Application for IRS Individual Taxpayer Identification Number: used to apply for an IRS individual taxpayer identification number (ITIN)
Income and Payment Reporting Forms
Form W-2, Wage and Tax Statement: used to report wages paid to employees and the taxes withheld from them
Form 1098, Mortgage Interest Statement: used to report mortgage interest of $600 or more received by you during the year
Form 1098-T, Tuition Statement: used to report tuition payments received and payments due from the paying student
Form 1098-E, Student Loan Interest Statement: used to report the amount of interest you paid on student loans in a calendar year
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions: used to report any gains and losses from stock and bond transactions made throughout the tax year
Form 1099-C, Cancellation of Debt: used to report canceled debt, which is generally considered taxable income
Form 1099-DIV, Dividends and Distributions: used to report dividends and other distributions to taxpayers and to the IRS
Form 1099-G, Certain Government Payments: used to report payments received from federal, state, or local governments. Examples include unemployment benefits, tax refunds, grants, etc.
Form 1099-INT, Interest Income: used to report interest income you received, any taxes withheld, and if any of the interest is tax-exempt
Form 1099-K, Payment Card and Third Party Network Transactions: used to report payments and transactions from online platforms, apps or payment card processors. Examples include Venmo, PayPal, eBay, Etsy, etc.
Form 1099-MISC, Miscellaneous Income: used to report miscellaneous compensation such as rents, prizes, medical payments, and others
Form 1099-NEC, Nonemployee Compensation: used to report self-employment or contract work, such as freelance work or rideshare driving
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.: used to report distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions
Form 1099-S, Proceeds from Real Estate Transactions: used to report the sale or exchange of real estate
Business Forms
Form 1120, U.S. Corporation Income Tax Return: used to report income, gains, losses, deductions, credits of domestic corporations.
Form 1120-S, U.S. Income Tax Return for an S Corporation: used to report the income, gains, losses, deductions, credits, etc., of a domestic corporation or other entity for any tax year covered by an election to be an S corporation
Form 2106, Employee Business Expenses: used to deduct ordinary and necessary expenses for your job
Form 4562, Depreciation and Amortization (Including Information on Listed Property): used to record the depreciation and amortization of property you’ve purchased for your business
Form 8829, Expenses for Business Use of Your Home: used to figure the allowable expenses for business use of your home on Schedule C
Form 941, Employer’s Quarterly Federal Tax Return: used to report income taxes, Social Security tax, or Medicare tax withheld from employee’s paychecks
Tax Resolution Forms
Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship: used to request an extension of time under Internal Revenue Code section 6161 for payment of tax due
Form 11277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien: used to request a tax lien removal.
Form 12153, Request for a Collection Due Process or Equivalent Hearing: used to request a Collection Due Process (CDP) or Equivalent Hearing (EH) with the IRS Independent Office of Appeals
Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals: used to obtain current financial information necessary for determining how a wage earner or self-employed individual can satisfy an outstanding tax liability
Form 433-B, Collection Information Statement for Businesses: used to obtain current financial information necessary for determining how a business can satisfy an outstanding tax liability
Form 656, Offer in Compromise: used to apply for an Offer in Compromise (OIC)
Form 843, Claim for Refund and Request for Abatement: used to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax
Form 8857, Request for Innocent Spouse Relief: used to request relief from tax liability, plus related penalties and interest, when you believe only your spouse or former spouse should be held responsible for all or part of the tax
Form 911, Request for Taxpayer Advocate Service Assistance: used to request taxpayer assistance if you have been unable to resolve your tax issues through normal channels
Form 9423, Collection Appeal Request: used to request an appeal of a notice of federal tax lien, levy, seizure, or termination of an installment agreement.
Form 9465, Installment Agreement Request: used to request a monthly installment plan if you cannot pay the full amount you owe shown on your tax return
Tax forms can be difficult to understand on your own. If you need tax help, the experts at Optima Tax Relief can assist. With over a decade of experience helping taxpayers, Optima is equipped to take on the most complicated tax situations.
Filing your taxes can be challenging, especially if you are missing crucial documents like your W-2 form. A W-2 tax form shows important information about the income you’ve earned from your employer, how much taxes were withheld from your paycheck, benefits provided and other details for the year. You file your federal and state taxes with this form. But what happens if you lose your W-2? If you lose your W-2 form, don’t panic. Here are some options you have if you do not have your W-2 form when filing your taxes.
Contact Your Employer
If you lose your W-2, your first reaction should be to contact your employer to request a replacement. You will typically need to contact your Human Resources department to obtain a duplicate. This is also true if you are trying to obtain a W-2 for a previous year or for an employer you no longer work for. Employers are required to keep copies of W-2 forms for four years; however, some may keep them for longer. It’s important to be aware that some employers might charge you a fee for providing a copy of your W-2. You should contact your employer for a copy of your W-2 form if you did not receive one for the year at all. Employers are required by law to distribute W-2s by January 31st of each year. You should note that some employers distribute these forms electronically through email or an employee portal. If you haven’t received one by early February, you might want to contact your employer.
Contact the IRS
In some rare cases, your employer may not be able to help you obtain another copy of your W-2. In this case, you can contact the IRS for help. During your phone call, you’ll need to verify your identity by providing your name, address, phone number and Social Security number. You will also need to provide your employer’s information and other employment information, including employment dates, estimate of wages and amount of federal taxes withheld last year. The IRS will reach out to your employer on your behalf and request your W-2 be sent to you. Note that the IRS will contact your employer about the current tax year’s W-2. If you’re looking for a previous tax year’s W-2, you’ll need to request a transcript copy from the IRS. The transcript will include federal tax information your employer reported. That said, it will not include any state or local tax information reported by your employer. Transcripts are available for up to 10 years.
Contact the Social Security Administration
Since your employer reports your earnings to the Social Security Administration, you can request copies of your W-2s from them if you lose the original. You can request a copy for any W-2 from the years 1978 to the present, however it may cost you. You can get free copies if you need them for a Social Security-related purpose. There is a $126 fee per request for other purposes including:
Federal or state tax filings
Residency establishment
Private pension entitlement
Worker’s compensation income information
If you are seeking W-2s from multiple tax years, this option can quickly become expensive. In some cases, it might be necessary to find all the relevant information needed to file both federal and state tax returns.
Tax Help for Those Who Lost Their W-2
Remember that just because you lost your W-2, or never received it, you still may need to file your taxes if you meet certain income thresholds. Locating a lost W-2 can be tricky and time-consuming, especially if it’s from a previous tax year or from an employer that you no longer work for. If you need help with your tax debt, tax relief is always an option. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
