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The IRS Form 1099 can be an important part of filing annual income taxes for some earners, such as freelancers, independent contractors, some retirees, and income-earning stock investors. The 1099 form captures information about income earned from a non-employer source or salary. It can be filed by either a company or individual who paid the recipient of the form.

But these documents can at times get confusing because of the multiple varieties of 1099s. These can include 1099-MISC, 1099-DIV, 1099-INT, and more. Each shows a different sort of financial transaction that occurred in a given tax year.

To get help understanding these critical tax documents, read on.

What Does IRS 1099 Form Document?

IRS Form 1099 reports income earned from self-employment, interest, dividends, and other sources. 1099 recipients can get the IRS form from the company, state, individual, or organization that paid them potentially taxable income.

Since this document can contain information about possibly taxable income (pre-deductions), it’s worth holding on to all 1099s received — whether printed or sent electronically. IRS 1099 forms can be helpful when filing both state and federal income taxes. Knowing how to read these forms can play a key role in understanding your taxes.

Who Gets a 1099?

Should you expect a 1099? Well, it depends. If you do any work as a freelancer or an independent contractor, then it’s likely that you will receive one for pretax, non-employee compensation.

More specifically, the answer is yes if (in 2025) you received at least:

•   $600 in business rental income

•   $600 for services from a person or business that is not your employer

•   $600 in prizes or awards

•   $10 or more in interest from a savings account or CD

Note that for 2026, the threshold for forms 1099-NEC (non-employee compensation) and 1099-MISC (rent or prizes) increase to $2,000.

Another common reason you may receive an IRS Form 1099 is investment income. If you own bonds, dividend-paying stocks, or mutual funds that produce income, it’s likely that you’ll receive a 1099 that outlines the income for which you’ll be liable. Even if you reinvest those dividends immediately, you’ll have to pay income tax on dividends that have been paid out.

Like an IRS W-2 form, a 1099 reflects your income for a given year. But a W-2 reflects income from wages or a salary, which come to you with the taxes already having been deducted. A 1099 shows gross, or raw, income that has yet to be taxed. Some (but not all) recipients may qualify for further tax deductions on the income listed on the 1099 form.

Different Types of 1099 Forms

What is a Form 1099? As briefly mentioned above, there are multiple types of 1099s, reflecting different kinds of money that you may receive in a given year. Some might show active income, such as money you earned as a freelancer or by starting a side hustle. Others might capture passive income, money that’s earned on, say, renting a second home as an Airbnb. You might also have received funds that are interest earned on your stock portfolio.

Whether you’re filing taxes for the first time or have been doing so for years, keep reading to learn a bit more about these different forms.

1099 Forms for Earned Income

Here are some of the 1099 forms you may receive as you prepare for tax season, reflecting income earned as a non-employee in the previous year:

•   1099-NEC: The IRS implemented this form in 2020 for non-employee compensation (hence the initials NEC). It is replacing the 1099-MISC for many non-employee workers. It is what you may receive if you freelanced for clients, are a self-employed contractor, or if you have a side gig of some sort.

•   1099-K: This form has new guidelines. For tax year 2025 and 2026, 1099-K forms will be issued by payment apps and online marketplaces when the total payments exceed $20,000 and 200 transactions in a year.

1099 Forms for Passive Income

What’s a 1099 for passive income? First, you need to know that passive income is money you earn from such endeavors as a limited partnership, a rental property, or another enterprise that doesn’t require active participation.

The 1099 forms you may receive to show earnings of this kind include:

•   1099-MISC: In the past, independent contractors and freelancers would receive this from those who have paid them at least $600. Now, that kind of income, which is subject to self-employment tax, is shared via a 1099-NEC (see below). The 1099-MISC has shifted to show income that is not subject to self-employment taxes, such as rent or prize money.

1099 Forms for Portfolio Income

Next, explore what is a 1099 form for portfolio income. Some people would say that your investment portfolio’s gains are a kind of passive income since you aren’t actively working to make the money; others would disagree.

That noted, here you’ll learn about 1099 forms for portfolio income as a separate entity from passive earnings such as earning money on a rental property you own.

The 1099-DIV and 1099-INT are perhaps the most pertinent types of 1099s for anyone who invests. It’s important to note that anyone who takes in more than $1,500 in interest or dividends during a given year will also have to file a Schedule B as part of their tax return.

Investment dividends and interest are both considered income and are taxed at your income tax rate. At the same time, capital gains made on short-term investments may also be taxed at your income tax rate.

It’s important to factor in any returns you’ve made on investments held for less than a year when tallying your tax return at the end of the year.

The 1099-DIV and 1099-INT are perhaps the most pertinent types of 1099s for anyone who invests.

Next, a closer look at the 1099s that are used to show earnings:

•   1099-B: Are you an income-earning investor? If you trade or barter securities, this form is the official record of the income you received on those trades, and it’s usually filed by the broker or clearing firm. This form can help you manage capital gains and losses on your income tax return.

•   1099-DIV: Annual dividends and distributions from any type of investment will show up on this form.

•   1099-INT: This reports interest income. It usually comes from a financial institution for interest income from a CD or savings account, as well as from Treasury bills and U.S. Savings Bonds.

•   1099-R is used to report distributions you may receive from retirement plans, IRAs, profit-sharing plans, annuities, and the like.

Other 1099 Forms You May Receive

In addition to the 1099 forms already noted, there are several more you may well encounter. These include:

•   1099-A: You’ll receive this form if your lender canceled some or all of your loan, usually because of a foreclosure.

•   1099-C: Debt forgiveness is considered income, and 1099-C tracks that income. (There’s an IRS Form 982 which, in certain circumstances, may allow you to exclude this income from your return.)

•   1099-G: If you received unemployment benefits or any other money from a state, local, or federal government, such as a tax refund or credit, you may receive one of these.

•   1099-S: Income earned on real estate transactions will be reflected in this form.

•   SSA-1099: This reflects the Social Security payments you’ve received in the past year.

Tabulating Tax Deductions for the Year

While wage and salary income are usually taxed before being disbursed to employees, other types of income usually aren’t. But that fact doesn’t mean 1099 recipients necessarily owe taxes on all of the income listed on the IRS 1099 form.

For instance, freelancers and independent contractors generally can, or must, pay estimated quarterly taxes to avoid a big tax bill each year. In these cases, they may even receive a tax return on their 1099-reported income (assuming overpayment).

At the same time, some 1099 recipients could have deductions that offset the income. Simply put, deductions reduce tax liability by lowering one’s taxable income for a given year. The standard deduction for tax year 2025 is $15,750 for single filers and $31,500 for married couples filing jointly. For tax year 2026, the standard deduction increases to $16,100 and $32,200, respectively. But itemized deductions might include:

•   Student loan interest

•   Mortgage interest

•   Qualifying charitable donations

•   Medical expenses (for those who itemize deductions).

If you’re a freelancer or independent contractor, you may be able to deduct a wide range of business-related expenses — including a home office, supplies, travel, and client dinners. This can lower your tax burden and possibly leave you with more money in your checking account.

Regardless of which deductions you claim, it’s important to invest time and thought on your tax return, perhaps using tax software or consulting with a tax professional, to make sure you’re neither overpaying nor underpaying your taxes. And also, of course, to make sure you aren’t missing the tax-filing deadline.

One more tip on getting organized: It can also be wise to check this year’s forms against the documents you received the previous year, to make sure you aren’t missing any tax forms.

For additional specifics on this tax filing season, 1099 recipients may want to check the IRS Filing and Payment Deadlines Questions and Answers page or contact the IRS at 800-829-1040 toll-free for help.

Tips for Filling Out a Form 1099

If you receive a 1099, you don’t need to fill it out in any way; you just need to account for it when filing your tax return.

If, however, you are the person responsible for filling it out, keep these tips in mind:

•   The payer information is where the name, address, taxpayer identification information, and other details about the issuing entity are added.

•   The recipient information is where you’ll fill in the specifics about the person who will receive the form. This is typically their name, address, and identifying information, such as a Social Security number (SSN).

•   Carefully fill out such applicable areas as non-employee compensation and federal and state income tax withheld when completing 1099-NEC forms.

Recommended: How to File for a Tax Extension

The Takeaway

IRS Form 1099 documents income earned from non-employer sources and can be used when filing and calculating one’s annual tax liability. It’s commonly sent to freelancers, independent contractors, investors, Social Security recipients, and those whose forgiven debts count as taxable income.

While thinking about your taxes, you may want to consider whether your banking partner is helping you keep your funds well organized.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What should I do if I do not get all of my 1099 forms?

If you don’t receive your 1099 forms by January 31st, which is the date they should be issued by, you might wait a couple of days to see if they arrive by mail. If not, reach out to the issuer to request your form; perhaps it can be downloaded quickly. If it is February 15th and you still don’t have the form, you can try to get the information you need from other sources (such as a bank statement) or else call the IRS helpline at 800-829-1040. Some services, such as TurboTax, may allow you to account for a missing 1099 while using their software.

What should I do if I make an error on a 1099 form?

If you receive an incorrect 1099 and inform the issuer, they can create and file a corrected version, which means both you and the IRS will have the updated document. If you are the issuer, it’s your responsibility to rectify the error and re-issue the form.

Is a 1099 the same as a W-2?

A W-2 is a form issued to employees to show their earnings and the taxes withheld. On the other hand, 1099s track financial transactions during a tax year, such as non-employee earnings, interest and dividends, rental income, and more. These transactions may be taxable events and have implications as you file your annual tax return.

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CN-Q425-3236452-136

While every investor has their own unique approach, certain best practices have been developed and refined over time by seasoned professionals.

That’s not to say that one investing strategy is inherently better or more successful than another — after all there are no guarantees or crystal balls in the market. However, understanding a few timeless principles can help you make more informed and confident investment decisions.

Basic Investing Principles

The following fundamentals hold true for many investors across a wide range of situations. While bearing them in mind won’t guarantee specific results, they can help you manage risk, control costs, and stay disciplined through the emotional ups and downs of investing.

1. The Sooner You Start, the Better

In general, the longer your investments remain in the market, the greater the odds that you might see positive returns. That’s because long-term investments may benefit from time in the market, not timing the market.

Markets inevitably rise and fall. The sooner you invest, and the longer you keep your money invested, the more likely it is that your investments can recover from any volatility or downturns.

Starting early also allows you to potentially benefit from compounding returns, which is when your returns earn returns of their own. The longer your money is invested, the more time it has to generate earnings, which you can opt to be reinvested to earn even more earnings, creating a powerful snowball effect.

💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

2. Make It Automatic

One of the easiest ways to build up an investment account is by automatically contributing a certain amount to the account at regular intervals over time. If you have a 401(k) or other workplace retirement account, you likely already do this via paycheck deferrals. However, most brokerages allow you to set up automatic, repeating deposits in other types of accounts as well.

Investing in this way also allows you to take advantage of dollar-cost averaging. This is an investment strategy where you invest a fixed amount of money into a specific investment at regular intervals, regardless of its current market price. This approach may help mitigate the impact of market volatility by smoothing out the average purchase price over time.

3. Take Advantage of Free Money

“If you have access to a workplace retirement account and your employer provides a match, contribute at least enough to get your full employer match,” advises Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “That’s a return that you can’t beat anywhere else in the market, and it’s part of your compensation that you should not leave on the table.”

Recommended: Investing 101 Guide

4. Build a Diversified Portfolio

Creating a diversified portfolio may reduce some of your investment risk. Portfolio diversification involves investing your money across a range of different asset classes — such as stocks, bonds, and real estate — rather than concentrating it in one area. Studies indicate that diversifying the assets in your portfolio may offset a certain amount of investment risk by reducing exposure to any single asset or risk source.

Taking portfolio diversification to the next step — further differentiating the investments you have within asset classes (for example, holding small-, medium-, and large-cap stocks, or a variety of bonds) — may also be beneficial.

5. Reduce the Fees You Pay

Whether you take an active, passive, or automatic approach to investing, you’re likely going to have to pay some fees. For example, if you buy mutual funds or exchange-traded funds (ETFs), the main annual costs, known as the expense ratio, are automatically deducted from the fund’s total assets, directly reducing the fund’s net asset value (NAV) and lowering your overall investment returns.

Fees can be one of the biggest drags on investment returns over time, so it’s important to look carefully at the fees that you’re paying and to occasionally shop around to see if it’s possible to get similar investments for lower fees.

6. Stick with Your Plan

When markets go down, it can feel like the world is ending. New investors might find themselves pondering questions like: How can investments lose so much value so quickly? Will they ever go back up? What should I do?

During the crash of early 2020, for example, $3.4 trillion in wealth disappeared from the S&P 500 index alone in a single week. And that’s not counting all of the other markets around the world. But over the next two years, investors saw big gains as markets hit record highs.

The takeaway? Investments fluctuate over time and managing your emotions can be as important as managing your portfolio. If you have a long time horizon, you may not need to be overly concerned with how your portfolio is performing day to day. It’s often wiser to stick with your plan, rather than buy or sell based on emotional reactions to short-term external factors.

7. Maximize Tax-Advantaged Accounts

Like fees, the taxes that you pay on investment gains can significantly eat away at your profits. That’s why tax-advantaged accounts, those types of investment vehicles that allow you to defer taxes, or enjoy tax-free withdrawals, are so valuable to investors.

The tax-advantaged accounts that you can use will depend on your workplace benefits, your income, and state regulations, but they might include:

•   Workplace retirement accounts such as 401(k), 403(b), etc.

•   Health Savings Accounts (HSAs)

•   Individual Retirement Accounts (IRAs), including Roth IRAs, SEP IRAs, SIMPLE IRAs, etc.

•   529 Accounts (college savings accounts)

Recommended: Benefits of Health Savings Accounts

8. Rebalance Regularly

Once you’ve nailed down your asset allocation, or how you’ll proportion out your portfolio to various types of investments, you’ll want to make sure your portfolio doesn’t stray too far from that target. If one asset class, such as equities, outperforms others that you hold, it could end up accounting for a larger portion of your portfolio over time.

To correct that, you’ll want to rebalance once or twice a year to get back to the asset allocation that works best for you. If rebalancing seems like too much work, you might consider a target-date fund or an automated account, which will rebalance on your behalf.

9. Understand Your Personal Risk Tolerance

While all of the above rules are important, it’s also critical to know your own personality and your ability to handle the volatility inherent in the market. If a steep drop in your portfolio is going to cause you extreme anxiety — or cause you to make knee-jerk investing decisions — then you might want to tilt your portfolio more conservatively.

Ideally, you’ll want to land on an asset allocation that takes into account both your risk tolerance and the level of risk required to have a reasonable chance of reaching your specific financial goals.

If, on the other hand, you get a thrill out of market ups and downs (or have other assets that make it easier for you to stomach short-term losses) and a long time horizon, you might consider taking a more aggressive approach to investing.

💡 Quick Tip: If you’re opening a brokerage account for the first time, consider starting with an amount of money you’re prepared to lose. Investing always includes the risk of loss, and until you’ve gained some experience, it’s probably wise to start small.

The Takeaway

The rules outlined above are guidelines that can help both beginner and experienced investors build a portfolio that helps them meet their financial goals. While not all investors will follow all of these rules, understanding them provides a solid foundation for creating the strategy that works best for you.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

FAQ

How much will $100 a month be worth in 30 years?

The value of $100 invested monthly for 30 years depends on the rate of return. If you consistently invest $100 per month, your total contribution is $36,000. If you earn an average 5% annual return, you’d have about $83,800, assuming returns are compounded daily. At 7%, it’s closer to $123,000 and at 10%, you’d have around $230,000. Keep in mind, however, that investment returns are not guaranteed and these examples do not account for investment fees, expenses, or taxes, which would reduce actual returns.

What are the four golden rules of investing?

While there is no single, universally agreed-upon list, four fundamental and time-tested principles of investing are: starting early to take advantage of compounding returns; diversifying your portfolio to manage risk; keeping costs and fees low; maintaining a long-term perspective and avoiding emotional, short-term reactions to market volatility.

What is the 70/20/10 role in finance?

The 70/20/10 rule in finance is a simple budgeting guideline for allocating your after-tax income. According to this rule:

•   70% of your income should go toward needs (like living expenses) and daily spending.

•   20% is dedicated to saving and investing, building your long-term wealth and financial security.

•   10% is allocated to debt repayment (beyond minimum payments) and charitable contributions.

This breakdown helps individuals prioritize financial health by ensuring savings and investment are part of the core budget.