1099 Misc Information for Bloggers
Your first year filing taxes as a blogger can be a bit confusing, especially if this is the first time you’ve filed as anything other than a traditional employee. Instead of getting a W-2 with all your income information you will be getting form 1099 Misc.
Independent contractors have of course seen these before, but a lot of bloggers haven’t. So what do you do with this form exactly? And what if you made money but didn’t even get one?
If running your own small business is new to you, don’t worry. It is normal to be a bit confused the first time you deal with 1099 Misc forms. Here are some tax tips to help you learn about 1099 forms and how to handle them on your tax return.
1099 Misc Information for Bloggers
Types of 1099s
There are actually a lot of different types of 1099 forms. You might be more familiar with some of the forms 1099 like the 1099-DIV or 1099-INT. These are where you get your tax information for the dividends and interest you received during the tax year.
The 1099 Misc is similar in that it provides information about the income you received to help you with your tax preparation. (So when you get these in the mail keep them with your other tax forms to share with your tax professional.)
What the 1099 Misc Means to Bloggers
So what do blogging and 1099 misc forms have to do with each other?
The 1099 Misc is used to report non-employee compensation. This means it is used for independent contractors, for example. They are not employees of a company, but they might do work for one. So instead of getting a W-2, which is for employees, non-employees get the 1099 tax form.
Bloggers can make money in many different ways, and a common way is through sponsored content. When you get paid to post something you are receiving non-employee compensation. This sort of compensation isn’t limited to sponsored content, so don’t forget about your other blog income streams.
(Don’t forget compensation includes receiving free products. Learn more about that here: When Free Stuff Isn’t Free: Barter Transaction for Bloggers)
If you have received payments during the tax year from a company of over $600, and you are not a C Corp, you should receive a 1099 Misc with your income information. (If you aren’t sure what sort of entity you are, check out this post: Business Entities for Bloggers.)
Common Misconceptions about 1099 Miscs
There can be a lot of confusion surrounding 1099 Misc forms, so let’s clear the big ones up.
Not Receiving a 1099 Misc Means You Don’t Have To Report That Income
This is a big old no. Not receiving a 1099 Misc does not mean you get to skip reporting that income. Even if you were supposed to receive one and didn’t, the IRS doesn’t care. You know you made the money, you report it.
There could be reasons that you didn’t receive a form. Being paid under the $600 from a single company is a big one. Or the company that paid you could have messed up somewhere. I can’t emphasize this enough, not receiving a form does not mean you are exempt from reporting the income.
It can be common for bloggers to receive small amounts of money from several sources, so keep track of your earnings and report them all.
Receiving a 1099 Misc Means You Don’t Need To Pay Self-Employment Taxes
When you are a traditional employee, the FICA taxes, Social Security and Medicaid, are taken out of your paycheck. You pay half and your employer pays half. When you are self-employed, you are responsible for the whole tax. This is your self-employment tax.
A lot of bloggers are used to getting a W-2 with all their tax information. The FICA is handled on that form. So they might think that since they received a tax form with their income information that these taxes are still handled. They aren’t.
If you receive 1099 Misc forms for your income you are still responsible for your self-employment taxes. (And you are responsible for them even if you don’t get any 1099 Misc forms. Learn more here: Self-Employment Taxes for Bloggers)
You Didn’t Get a 1099 Misc From PayPal
There can be some confusion when it comes to 1099s and PayPal. The 1099 Misc is only applicable to cash, checks, and ACH bank payments. If you were paid by credit card or through PayPal you will not be getting a 1099 Misc.
PayPal and other credit card processing systems have their own form, the 1099-K. The minimum amount needed for this form is higher than that of the 1099 Misc so you might not receive a 1099-K. But just like with the 1099 Misc, it doesn’t matter if you receive a form or not. You need to report the income.
Every so often a company will pay you through PayPal but still send you a 1099 Misc. You will want to bring this to the attention of your tax professional, as the IRS might think you made more money than you did. (Getting both forms could mean double reporting to the IRS.)
This is why it is so important to have a solid tracking system for your income as well as your business expenses. Get the simplest system to track your blogging revenue: Bookkeeping Organization for Bloggers.
Talk To Your Tax Professional
Any time you have a change to your tax situation, like adding in a new revenue stream from blogging, you should talk to your tax professional. She can help walk you through the steps you need to take to report your income properly.
Yes, there is tax software that can help you file your taxes with your 1099 Miscs, but it does not replace getting proper professional guidance. And congratulations, getting 1099 Miscs means your blog is making money. That’s the goal.