Jan 16, 2023 What Is an IRS 1099 Form and Which Form 1099 Might You Be Receiving This Year?
As an American living in Israel, you may have received one or more IRS 1099 forms in the mail if you received income from sources other than a traditional salary or wages. But what exactly is a 1099 form, and which form might you receive this year?
An IRS 1099 form is a tax document used to report income that is not salary or wages. The income is reported by the payor to the IRS; therefore, it is important for the taxpayer to be sure to keep track of any 1099 received so that it will be properly reported on their tax return.
Types of 1099 Forms
There are many types of 1099 forms; each used to report a specific type of income. Some common types of 1099 forms include:
- 1099-INT: Used to report interest income
- 1099-DIV: Used to report dividend income
- 1099-NEC: Used to report miscellaneous income such as freelance or contract work
- 1099-R: Used to report distributions of pensions, annuities, and profit-sharing plans
For example, if you received interest from a bank account or dividends from investments, you would receive a Form 1099-INT or Form 1099-DIV, respectively. If your income from your investment account was less than $10, you might not receive Form 1099. If you did freelance or contract work, you would receive a Form 1099-NEC. If you received more than $600 in freelance income from a single source, the payor is required to send you a Form 1099-NEC. If you received less than $600, you still need to report the income on your tax return.
Review your Forms
It’s important to carefully review your 1099 forms and ensure that the information is accurate. If you find any errors, you should contact the payor and request a corrected form, as the income is reported directly to the IRS. It’s also a good idea to keep copies of your 1099 forms for your records. By February, you should already have your 1099 forms, and you should send them to your tax associate as soon as you have all of them.
As a dual citizen living in Israel, you may need to file a tax return in both the U.S. and Israel. It’s important to carefully review the tax laws of both countries to ensure that you are in compliance and paying the correct amount of tax. In the U.S., you will need to report your worldwide income, even if you live abroad. Regarding Israeli tax, you should consult your Israeli tax accountant to determine whether the income reported on your Form 1099 should be reported. If you are in your first 10 years of Aliyah, generally, income earned from outside Israel would not be reported. However, any freelance work earned while in Israel should be reported here.
In summary, an IRS 1099 form is a tax document used to report various types of income. It’s important to carefully review your 1099 forms for accuracy and keep copies for your records. As a dual citizen living in Israel, it’s also important to review the tax laws of both countries to ensure that you are paying the correct amount of tax.
