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How To File A Form 1099-MISC For Your Business

To track miscellaneous income in a business, the Internal Revenue Service uses a form 1099-MISC. The IRS uses this form to track all payments that you made to independent contractors if you are a small business owner. An independent contractor is anyone you hire to do a service for you on contract.

An independent contractor that you pay includes someone like a web designer or a copy writer. You only need to file a form 1099-MISC every year if you hired an independent contractor that particular year. You should not file a form 1099-MISC for your employee, they have a wage file for themselves so do not misclassify your employees for there is a penalty.

One of the easiest way to file a 1099-MISC is through the online channel. Normally, the site will guide you through the process of filing your returns. Gathering all the relevant information is the first step you do in filing of the 1099-MISC. The amount you paid the independent contractor, the contractor’s legal name and address as well as the tax identification number should be all the information included. To get the relevant information, make sure that the independent contractor fills out a W-9 form. To confirm everything is correct, make a thorough check on your account books.

There are two copies when you fill a form 1099-MISC, copy A and B. The independent contractor should be sent copy B of the form while copy A should be the one submitted to the IRS. It is a requirement to fill out a 1096 form if you are physically dropping off your form 1099-MISC. Make sure to put the state in which your business is located, it is one of the requirements. Make sure that you hit the deadlines since if you are late then there is a penalty that comes with late filing of returns.

The online process of filing returns differs from the physical one when filling out a form 1099-MISC. In order to complete the whole filing process, you need a FIRE system to do so. After filling out copy A of the form 1099-MISC in that way, you then mail it to the IRS. For the copy B, you need to email the independent contractor.

Make sure to ask for consent from the contractor even before you email the form 1099-MISC. There is a system used to ask for consent from the contractor before you email in order to show the IRS. You should have all the requirements for sending the email and have to comply with the IRS rules. You can thereafter send copy B of the form 1099-MISC when the contractor responds by giving you consent.

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