Sole Proprietor and 1099 Forms
A sole proprietor typically does not receive a 1099 form. Sole proprietors use this form to report contractor earnings.
As a sole proprietor, you may receive a 1099 form for income from a business or individual. For example, credit card payments are on a 1099-K from the processor, not the client.
Sole Proprietorship Responsibilities
A sole proprietorship is run by one person. It can operate full or part-time in any industry. The holder is responsible for all aspects.
Reporting Taxes as a Sole Proprietor
Only your business, including your sole proprietorship, must issue a 1099-MISC or 1099-NEC. File this form with the IRS and any unincorporated business or individual you paid over $600 in a tax year.
The IRS considers sole proprietor business income as personal income. Sole proprietors pay self-employment tax using Schedule C with Form 1040.
You get a 1099-NEC if a company paid you over $600 in non-employee compensation. Use it to report income on your tax return. If you sell products, you may not get a 1099-NEC. Your neighbor would not send one for house repairs.
If you receive a 1099-MISC by mistake, contact the company to fix it.