How To Fill Out A 1099-MISC Form
Ever had to fill out a 1099-MISC form? As a small business owner or a self-employed individual, you should know all about it! If not, it is high time you reassess your tax responsibilities. A small business owner must report non-employee payments to the Internal Revenue Service (IRS) each year.
It is the responsibility of a self-employed individual to report their revenue each quarter. Tax cannot be evaded! To fulfill your tax obligations you must fill out a 1099-MISC form and submit this to the IRS.
In this blog, we provide a simple understanding of a 1099-MISC form and a step-by-step guide to filling one out.
What is a 1099-MISC Form?
Small business owners must submit a yearly 1099-MISC tax form for each independent contractor paid over $600 in that year. Self-employed individuals must fill out a 1099-MISC form if they earned over $3000 in one year.
Along with paystubs or invoices, you should receive this form in the mail from each employer you worked for during the year. If you did not receive this form in the mail, it is your responsibility to source one and file your tax return.
How to Fill Out a 1099-MISC Form
As a small business owner or self-employed individual, below are the steps to fill out a 1099-MISC form.
Enter your information in the 'payer' section.
Complete your personal details in the box in the top-left corner, including your full names, home address, contact number etc.
Fill in your tax ID number. As an independent contractor, use your social security number. As a business owner, use your business taxpayer ID number.
As a business owner, enter the contractor's tax ID number which is found on their form W-9.
Then, enter their personal information under this box - which is also found on form W-9.
Fill out the account number you have assigned to the independent contractor.
This account number is only required if previous 1099 forms have been corrected.
For self-employed individuals, this account number should already be filled out if you received your 1099-MISC form in the mail.
Enter the total amount you paid the independent contractor in box 7.
Self-employed individuals must simply enter the total amount earned from the employer in box 7, if it is not already filled out.
How to File a 1099-MISC Form
Now that you understand the basics on how to fill out a 1099-MISC form, here's some information on how to file it:
- To be sent to the IRS: Copy A
- To be sent to the state tax department: Copy 1
- To be sent to the contractor: Copy B and Copy 2
- To keep for your own records: Copy C
The deadline for filing your 1099-MISC form is January 31st. Make sure to send both a copy to the contractor and the IRS before this date. Lastly, as a business you will also need to submit 1096 form to the IRS. This form is a summary of all the 1099 forms you have submitted for each independent contractor. Ensure you display the total amount paid throughout the year on form 1096, which must also be submitted by January 31st.
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