How To Fill Out A 1099-MISC Form?

Oct. 27, 2017

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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.

Step One:

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.

Step Two:

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.

Step Three:

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.

Step Four:

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.

Step Five:

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 a 1099 misc form:

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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Frequently Asked Questions

No, you do not need to withhold taxes from the payments reported on a 1099-MISC form. The recipient is responsible for paying their own taxes on the income reported.

You can obtain a 1099-MISC form from the IRS website, a local IRS office, or an office supply store. Note that the forms are pre-printed with scannable red ink, so you cannot simply print a copy from the IRS website.

There are several boxes on the 1099-MISC form for reporting different types of income. For example, non-employee compensation is reported in Box 7, while rent is reported in Box 1. Make sure to read the form instructions to determine which box corresponds to the type of payment you made.

Failure to file a 1099-MISC form can result in penalties ranging from $50 to $270 per form, depending on how late the form is submitted. The maximum penalty for small businesses is $1,113,000 per year.

You will need the following information to fill out a 1099-MISC form: payer's name, address, and tax identification number; recipient's name, address, and tax identification number; and the total amount paid to the recipient during the tax year.

A 1099-MISC form is an Internal Revenue Service (IRS) tax form used to report income received by independent contractors, freelancers, and other self-employed individuals. It is also used to report certain types of payments such as rent and royalties.

If you made a mistake on a 1099-MISC form, you should file a corrected form as soon as possible. Obtain a new 1099-MISC form, check the "CORRECTED" box at the top of the form, and enter the correct information. Send the corrected form to the IRS and the recipient.

The deadline for submitting a 1099-MISC form to the IRS is January 31st of the year following the tax year in which the payments were made. If the deadline falls on a weekend or holiday, it is extended to the next business day.

For more detailed instructions on filling out a 1099-MISC form, visit the IRS website and download the official instructions, or consult a tax professional.

Business owners and individuals who have made payments to non-employee service providers, such as independent contractors or freelancers, need to fill out a 1099-MISC form. The form needs to be sent to the IRS and the payee.

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