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How To File A Form 1099-MISC For Your Business

A 1099-MISC form is used by the Internal Revenue Service to track miscellaneous income in a business. To track all the payments that you have made to independent contractors as a small business owner, the IRS uses this form to track all those payments. If you hire anyone on contract, he or she is termed as independent contractor.

If you hire a web designer or a copy writer for example, that is an independent contractor that you pay. A form 1099-MISC is only needed to be filed if you hired an independent contractor in that year. For employees, you should not file a form 1099- MISC for them, they have a wage file for themselves so make sure not to misclassify them to avoid a penalty that comes with that.

The online channel is the easiest way to file a 1099-MISC. 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. All the details that are needed include the amount you paid the contractor, the contractor’s legal name and address as well the tax identification number. In order to get the needed information, you can have the contractor fill out a W-9 form. To confirm everything is correct, make a thorough check on your account books.

When filling a form 1099-MISC, there are two copies which are copies A and B. The copy that you submit to the IRS is copy A while the independent contractor should receive the copy B. If you are physically submitting a form 1099-MISC then fill out a 1096 form because it is a necessity for the IRS. Make sure to put the state in which your business is located, it is one of the requirements. Since there is a penalty for late filing of returns, hitting deadlines will help you avoid that.

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.

You need to ask for consent from the contractor before you even 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. The contractor thus gives a response by giving you the consent and you are free to send the form 1099-MISC copy B.

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