This tax season we’ve prepared the following Form-1099 FAQ to assist you as you prepare to file
What is a Form 1099?
A 1099 is an informational form designed to assist in tax reporting. There are numerous 1099 form types, with the 1099-K being the most relevant to HealthFreelance users and the 1099-MISC being the most common.
Will I get a 1099-MISC or 1099-K?
If you’re a freelancer defined as a “U.S. Person” by the Internal Revenue Service (IRS) and earn money working with your client through HealthFreelance, you will need to report this income on your tax return. Because of changes to the tax laws in the last few years, freelancers will not receive a Form 1099-MISC from HealthFreelance and your clients on HealthFreelance should not send you a 1099-Misc either.
We recommend that all freelancers use your invoices found within each Project workspace to accurately document your earnings. Most freelancers won’t receive any tax forms from their contracts on HealthFreelance with one important exception:
Freelancers who are U.S. Persons and receive over $20,000 with more than 200 transactions through HealthFreelance
I am a qualified freelancer. What’s next?
Qualifying freelancers will receive a form called the Form 1099-K (not to be confused with the more common 1099-MISC). Under the Internal Revenue Code Section 6050W, HealthFreelance will file a Form 1099-K form with the IRS for you, and you will receive a copy of your Form 1099-K electronically or via U.S. Postal Service by January 31. Remember that only those who have received over $20,000 in gross payments and more than 200 incoming transactions will receive a 1099-K. If you don’t meet the minimum payment threshold and/or transaction count, you will not receive any type of 1099 form.
If you took in greater than $20,000 but less than 200 transactions or less than $20,000 but greater than 200 transactions, no 1099-K would be sent.
Only Freelancers who took in at least $20,000 and more than 200 transactions would receive a 1099-K.
In the IRS code, it specifies that the 1099-K form is the record of gross payments (not the net amount paid out). Meaning, it includes all payments to the freelancer on all contracts. This includes the amounts you may have paid to HealthFreelance as fees or to your clients as refunds rather than what was withdrawn from your account.
Tip: The service fees you pay to HealthFreelance may be a tax-deductible business expense and refunds may not be considered earnings for tax purposes. Because the 1099-K is a record of payments only, what you report as income/earnings to the IRS might be different than the amount on the 1099-K form.
HealthFreelance does not provide tax or legal advice. The above information does not and should not substitute for legal or tax advice from a qualified professional. We strongly encourage readers to seek the appropriate advise based on their particular situation.