Missed a 1099 on your tax return? Here’s What Can Happen If You Don’t Fix It – Latest News Update

One of the challenges gig workers face is keeping track of different sources of income throughout the year – and remembering to pay taxes on all of them. Whether you’re a small business owner, an independent contractor, or someone with a bunch of side business, you can have dozens of different beneficiaries sending you 1099 forms during tax season.

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That doesn’t even include 1099 income earned from interest from savings accounts, debt forgiven and other sources. All of these sources of income must be reported on your tax return. Even if you did not receive a Form 1099 on the income you earned, you must still report the income. Failure to do so could cost you dearly in fines and late fees.

As mentioned on the Intuit TurboTax website, there are many different types of 1099 forms (and dozens of situations where one may be needed). The one thing they all have in common is that they relate to payments you receive that may be taxable. Because the 1099 you receive is also reported to the IRS, the IRS knows about your income — even if you forget to include it on your return.

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If the IRS finds that you owe additional tax on your unreported 1099 income, it will usually notify you and retroactively charge you penalties and interest from the first day they believe you owe additional tax. was, according to Intuit TurboTax.

You can usually expect the IRS to charge a late payment penalty of 0.5% per month as long as no late taxes have been paid. But if the 1099 income you forget to include on your return results in a substantial underestimation of your tax return, the penalty will be up to 20%, which will accrue immediately.

Substantial understatement applies if the income tax you did not report on your return exceeds $5,000 or 10% of the proper tax to be reported on your return. The fine is capped at 25%.

Payers have until January 31 to send you a 1099, so according to the IRS, you should receive them in early February. If you haven’t received a 1099 by then, please contact the payer. If you haven’t received one by mid-February, contact the IRS.

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Keep in mind that you are still responsible for reporting 1099 income whether or not you receive the form. That’s why it’s a good idea to keep a log of all 1099 income throughout the tax year. In some cases, you can also find 1099 earnings on bank statements or payment platforms.