Final answer:
An independent contractor receives a Form 1099-NEC that summarizes their income for the year, which is essential for reporting on personal income tax returns and contributes to funding public services.
Step-by-step explanation:
An independent contractor receives a tax document known as a Form 1099-NEC, which stands for Nonemployee Compensation. This form provides a record of the income they earned from each client or company they provided services for over the tax year. It's essential for independent contractors to report all earned compensation on their personal income tax return using this document. As an independent contractor, understanding the basic concepts of taxation and how to calculate your taxable income is crucial. Taxable income is typically calculated by subtracting deductions and exemptions from your adjusted gross income. Taxes paid by independent contractors help fund a variety of public services and are vital to community support.