If you earn $600 or more as an independent contractor, which tax form do you receive from the agency?

When you earn $600 or more as an independent contractor, the agency that pays you is required to issue you a Form 1099, specifically Form 1099-NEC (Nonemployee Compensation). This form is used to report payments made to individuals who are not employees but who have performed services for the agency. The 1099-NEC form clearly indicates the amount you earned during the year, which you then use to report your income on your tax return.

The significance of receiving a 1099 is paramount in understanding your income as an independent contractor, as it reflects the compensation you need to declare when filing your taxes. Balancing the accuracy of your earnings against what is reported on the 1099 is essential to ensure compliance with tax laws.

Other forms mentioned, such as the 1040, are individual income tax returns that you complete to report your total income and calculate your tax liability. A 2030 and a 1090 do not pertain to independent contractor reporting, making them irrelevant choices in this context.