A combined information return consolidates various income streams a single individual receives from a payer into a single document. Instead of receiving several individual forms reflecting different types of income, the recipient gets one comprehensive statement. For example, it might incorporate payments for services rendered as an independent contractor, royalty earnings, and dividends, all reported on a single document for convenience.
The advantage of this consolidated approach lies in its simplicity for both the payer and the payee. It reduces the administrative burden of generating and managing multiple documents. Recipients find it easier to track all their earnings from a specific source in a single place, simplifying tax preparation and financial record-keeping. Historically, businesses found that this approach saved time and resources compared to producing numerous individual forms, while recipients appreciate the organized overview of their diverse income.
