Overwhelmed by the Complexity of Accountants? This May Help
1099 tax designations are commonly called information returns. They are collected by the IRS to track the revenues that are paid to individuals. Below is a guide on how to fill it out.
Also called as the independent contractor form, this form shows how much you have paid someone for the questioned tax year. Suppose you have a gardener and you pay him $100 for one year to render gardening services, you would have to issue $1,200 as 1099-MISC. This is how IRS makes sure the gardener report all his revenues for the entire year.
In filling up this tax designation, you must first know the right format. Make sure you are using the MISC version as there are many types of 1099 forms. There are printable versions of this form in the internet but none of them will be honored. This is because IRS computers will read the forms and if you’re not using the official copy, you will have to fill up another form again. The official copies are distributed in big libraries, major post and IRS offices. To make sure you didn’t get the wrong copy, you to the nearest IRS Office to ask some. The IRS website has a system where you can order the official cope online for delivery.
Preparing the form is way easier than you think it is. Make your own guide in writing by printing our your own copy and the form and filling it up. Moreover, you may have to provide a total for the payments you made to a person. If you’re reporting for numerous people, get one form for each and fill them out separately.
The form has a top left box for your name, write your name on it. Next, fill up you business name or name followed by your contact number, your address and email. Write your tax identification number next in one digit per box. And to the right of your tax identification number, write the tax identification number of the person you are reporting for. On the bottom of the two boxes, write the address and name of that person.
The next thing you do is enter the total amount in dollars. The boxes running vertically n the middle of the form may have to be filled up by some. The box that appears first is the “1 Rents” field. If you are reporting for a paid rental, you may write it here. For a basic fee paid to someone for his services, put your annual report on box 7. This one is for the “nonemployee compensation.” Use this field if you don’t know that classification of your report as this is the mostly used field.
And there you have it! Once you’ve filled it out, mail the form and get another hard copy of it along with form 1096 which serves as the cover sheet of the forms you’re sending to IRS.