What is the 1099 Form?

It is important to understand the tax implications associated with your income as a contractor of a nonprofit. In this article, we will discuss what is the 1099 form, and what it means for those working for or with a nonprofit organization.

Working for a nonprofit organization, such as Legacy, as a contractor can have many benefits, with rewarding experiences and opportunities.  The contractor under a nonprofit organization, may be issued a 1099 form. In order to understand what a 1099 form means for you, we must first know what a 1099 is. 

The 1099 Form

The information return used to report income received from sources other than traditional employment, is a 1099 form.

Receiving a 1099 as a contractor for a nonprofit organization means you have different tax obligations than traditional employment. As a contractor for a nonprofit organization, you may receive a 1099  instead of a W-2. The purpose of the 1099 is to ensure that any income received, which is not subject to standard payroll withholding, is taxed and reported on.

When receiving a 1099 form from a nonprofit organization, it's essential to review the information provided is accurate. The form will typically include the following details:

• Payer Information: The nonprofit organization's name, address, and employer identification number (EIN).
• Recipient Information: Your name, address, and social security number (or taxpayer identification number).
• Income Information: The total amount of income you received from the nonprofit organization throughout the tax year.
• Nonemployee Compensation: This section specifically details the compensation you received as a contractor. It includes the total amount paid to you, and if applicable, any state income tax withheld.

Implications of Form 1099

It is essential to understand the tax implications associated with your income as a contractor. The tax implications of being paid by a nonprofit organization can be complex to navigate alone. Please consult a tax professional or certified public accountant (CPA) for financial and tax advice.

If you have any questions on the information of a 1099 form has been provided to you, please email support@legacyglobal.org to speak to a member of our team for additional details, or visit our support inbox.

This article has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.