Tax season is in full swing. People and businesses are scrambling to figure out how they will file their taxes and anticipating getting their W-2 Forms and more in the mail. While you prepare to file, make sure you don’t forget to file Form 1099-MISC for your independent contractors.
You’re actually required to issue copies of form 1099-MISC to your recipients by the January 31 deadline! That’s why TaxBandits is here to help by going over all of the important Form 1099-MISC filing instructions.
How To File Form 1099-MISC For Independent Contractors
Form 1099-MISC is used to report miscellaneous income or payments made by businesses to people not considered to be its employees for various services performed. Examples of miscellaneous income include payments made to subcontractor wages, rental payments, prizes, awards, and more.
Remember, you only need to file Form 1099-MISC for a contract worker if you paid them $600 or more for their services during the tax period. They will then use their form to complete their personal income tax return.
It’s important to keep a record of all payments made to independent contractors or vendors during the year so you can run a list to accurately file your taxes by the deadline.
When gathering your information to file you will need the name, address, and taxpayer ID or social security number for each person you will be filing a Form 1099-MISC form for. This information can be found on their W-9 Form, so be sure to get a copy from each payee.
If you need your independent contractor’s tax ID send them a W-9 and document your efforts to obtain this information. If you fail to get this info file Form 1099-MISC by the deadline turn in your Form 1099-MISC with zeros entered in the taxpayer ID field.
To complete Form 1099-MISC you will also need your EIN or Federal Employer Identification Number, business name, and business address. Then you will need to enter payment amounts in the correct box. For example Box 1 is for amounts paid in rent and box 7 is for payments for services performed by a non-employee.
Then you will need to enter the amount of federal income tax withheld for payments to the recipient in box 4. You will also need to enter state income and withholding information in section 409A. The amount of state tax withheld should be entered in box 16.
Note: If you have more than two states to enter information for you will need to file another Form 1099-MISC.
Box 17 is s for the state or payer’s state number, not your business state tax ID. You can find the state’s EIN by checking with your state department of revenue and state income should be entered in box 18.
Filing Form 1099-MISC
Once you have your information prepared you can quickly e-file Form 1099-MISC with TaxBandits. Simply follow our step-by-step instructions that explain what information you need to file and where it needs to be entered. You’ll have your form completed and transmitted directly to the IRS in no time.
You can also use our postal mailing feature to have us mail hard copies of Form 1099-MISC to each of your recipients! This will save you time and prevent you from having to deal with the hassle of goging to the post office!
For more information visit TaxBandits.com or contact our 100%, US-based TaxBandits support team.