The Steps Of Filing 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. 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.
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. You should not File A 1099-MISC Form 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 Form 1099-MISC is through the online channel. The site with usually guide you through the process of filing of taxes. The first step you do in filing of the 1099-Misc is to gather all relevant information. 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. Make a thorough check on your account books to confirm everything.
There two copies, Copies A and B when filling out form 1099-MISC. The copy that you submit to the IRS is copy A while the independent contractor should receive the copy B. It is a requirement to fill out a 1096 form if you are physically dropping off your form 1099-MISC. The other requirement is that you put the state in which your business is located. Since there is a penalty for late filing of returns, hitting deadlines will help you avoid that. Learn more about taxes at https://www.huffingtonpost.com/topic/taxes.
Filing returns physically and online differs a little when you are filling the form 1099-MISC. If you want to complete the whole filing process, you need to have the FIRE system. You then mail copy A of the form 1099-MISC to the IRS after filling it out that way. Make sure to email the copy B to the independent contractor.
Make sure to ask for consent from the contractor even before you email the form 1099-MISC. This is done in a systematic way where you have first to ask for consent through email to show the IRS. You should have all the requirements for sending the email and have to comply with the IRS rules. The contractor then responds and gives you the consent and you can now send the copy B of the form 1099-MISC.