A How-To Guide on Filing 1099-MISC Tax Form

 

The Form 1099-MISC is basically the most used tax form both by sole proprietorship business and self-employed individuals for the services they rendered to clients. You should be given by a business or client a 1099-MISC tax form in the event that you have worked for them as a freelance or a sole proprietor and the services has amounted to 600 dollars or maybe more.

 

Once you have acquired your 1099-MISC form, you have to immediately look at the "non employment compensation" or the box number 7. This is where your income from that said business will be recorded. You have to be sure to report this income on Schedule C as the IRS has obtained a copy of this form as well. For this reason, to File A Form 1099-MISC  has the same function as the W-2 in a way that it reports your income from this source to IRS. Even if you do not have your form 1099-MISC, you still are required to report the income when you're filing the tax return.

 

If you think that you are saved from not reporting your income if you made 600 dollars or maybe less from the income source every year, better think again. Earning less than this amount only indicates that the business you rendered your service for doesn't necessarily require you to send the 1099-MISC but still, it's your duty to report your earnings.

 

Now if for example that there is inaccurate income reported on 1099-MISC, then it is critical to do a follow up on the issuing business and they have to File A 1099-MISC Form and to the IRS. Under any circumstances, you have to wait until getting the right form before you file the income tax return. If for example that your Schedule C total as well as tally of all your 1099 forms don't match, then the IRS is going to reach out to you and ask for an explanation.

 

If you receive a 1099-MISC form after you filed the income tax, you don't have to do anything if you have reported the income as part of Schedule C earnings. If you didn't report your income, you'll have to send amended return and include the income it states in your 1099 MISC. Most likely, this is going to lead in owing bigger taxes and potentially with penalties and interests if the amended return is received after April 15 by the IRS. For more facts about taxes, visit this website at https://en.wikipedia.org/wiki/Taxability.

 

Make sure to do your best in keeping the records accurate throughout the course of the year and report all earnings to IRS when you filed the return.