As a follow-up to my post on keeping tax records, I came across this article on 1099s and reporting income (acknowledgment to the Roth & Company Tax Update Blog for pointing out the article in their May 8th Tax Roundup). My prior post focused on keeping records after you file a tax return. This article reminds us of the records to keep throughout the tax year. Specifically, it discusses the misconception that if you don’t receive a Form 1099 for income, you do not have to report the income. Wrong. All income must be reported, whether or not you received a 1099, W-2, etc. For example, most banks will not issue a Form 1099-INT if the interest on the account is less than $10, but that interest is still income and needs to be reported on your tax return.
Moral of the story: Save records like bank account statements throughout the year so you know how much income to report, even if you don’t get a 1099. For more information, read the full article here.