Know How To 1099 Someone Correctly
Any business person out there will at one time hire independent contractors to deliver various services.The contractor who charges more than 600 dollars has to receive the 1099 MISC forms from the client. The law forces clients paying more than 600 dollars to fill and send the forms.The law is clear and it gives the clients the right to file and submit the forms to every contractor hired. People in business must understand and know how to 1099 someone involved in the contract. A business person who deals with the contractor must know how the forms are done.If you have never done this before, follow the points below.
When an individual wish to understand how to 1099 someone, the first thing is to have every payment detail send to the contractors involved.You might have gathered every data needed, but the procedure proves hard for you. There are software’s that can help you do the 1099 MISC forms easily.
When you get the 1099 MISC forms, it shows the money paid as non employee compensation.This is the form that allows the independent contractors to calculate and file the taxes. The first thing is to check all your work. This includes gathering the correct details on the contractors. You must file the Form W-9 for each contractor. Include the names, addresses and SSN number. If the contractor has changed some details, make sure you countercheck.
After the above, have the 1099 forms. You can have the downloaded 1099 forms or get samples from the IRS. To make the submission easier, get the compatible forms with the IRS servers.
The downloaded forms need to be filled correctly.A client needs to indicate the contractor details and the Federal Tax ID number on the forms.Each form must show the amount paid. If some money was withheld, indicate it. Do not forget to fill in the federal or state income tax withheld.
You have to visit the contact section on the forms. Fill them for each contractor you have worked with. If you have the integrated software, this is filed automatically.
Once the information is detailed, you now send the forms. All the 1099 forms can be mailed or a copy given to the contractor before 1st February to beat the IRS deadline.
One you contact the contractor, the next thing is to mail the forms to the IRS, which summarizes the total returns. People are advised to mail these forms before the March 31st deadline to IRS. When using snail mail, mail the 1099 form and A copy of each to IRS before February 29. The client needs to remain with a copy C so that if questions come later, they can retrieve it.