If you pay an independent contractor to perform services for your company or business, then you likely need to report their pay to the IRS and to the contractor via form 1099-MISC. This form is an information return used to help businesses and individuals accurately report their income on their tax returns. It also provides a mechanism for the IRS to ensure that income is properly reported.
A 1099-MISC form is generally used to report any payments made to a service provider or contractor. It helps the IRS track how much they can expect in taxes from contractors and those who are self-employed. Though there’s a series of 1099 forms, the most common is the 1099-MISC form.
Who files a 1099-MISC form?
A company or business owner that makes payments to an independent contractor for services rendered is required to report those payments to the IRS and send a copy to the contractor. The independent contractor receives a copy for their records and the IRS gets a copy (either through electronic filing or direct mail).
When should 1099-MISC forms be issued?
For a specific year’s payments, companies must send 1099-MISC forms to recipients by January 31 of the following year. Companies must also send copies of each 1099-MISC form that is issued to the IRS. The deadline to send the forms to the IRS is January 31, whether 1099s are filed electronically or by mail.
Brown Smith Wallace offers a simple solution for electronically filing, printing and mailing your essential tax reporting forms. Electronic filing offers numerous advantages for your business. Contact us for assistance with electronically filing forms 1099 and W-2s.
- Small Business Monthly, 10.03.2019