A 1099 worker is also considered self-employed worker. You are your own 1-person business in the eyes of the IRS. Being a business, you are allowed to deduct business expenses, contribute to retirement at a higher rate, and have some other flexibilities. But with those benefits comes the need for accurate accounting, quarterly tax payments, and accurate expense tracking for deductions. A self-employed worker may receive 1099 form(s) from your clients at the beginning of the following calendar year. They are used to cross-check your earnings and to notify the IRS of these payments you received. Only a person who is self-employed receives these forms, either full-time or as a side-hustler.
However, in recent years with the increasing use of electronic payments, you may receive fewer 1099’s even though you had self-employed income. Therefore, do not think that you only need to report the income you received a 1099 form for, all income received throughout the year that was not part of your wages or investments needs to be accounted for on your taxes.
