What Is The 1099-MISC?

What is a 1099 MISC?

Generally speaking, the IRS requires you to report certain payments you made during the year to independent contractors. The 1099-MISC form is a single page on which you report the total amount you paid to the independent contractor during 2017.

The 1099-MISC forms must be issued to any person you paid at least $600 in rents, services, or other income payments. For example, if you hired a contractor to renovate a room in your home and paid them $5,000, a 1099-MISC filing would be required. As with practically any IRS filing, other situations require a 1099 filing. Any payments to attorneys must be reported regardless of the amount. Royalties totaling over $10 also must be reported. Generally, you are not required to report payments to a corporation.

When and What Must Be Filed?

The 1099-MISC form is a multi-layered carbon form, so make sure the information you provide appears clearly on all copies. Once you fill out the form, provide Copy B to the person reporting to the IRS by January 31.

Copy A of the 1099-MISC form is intended for the IRS. You must file it by February 28 if you send the form by mail. If you prefer to file electronically, you have until March 31.

The IRS has made a significant effort to cut down on red tape, but you’ll still find it with 1099-MISC filings. In addition to filing 1099 with the IRS, you must also file a 1096 form. The 1096 form is the “Annual Summary and Transmittal of U.S. Information Returns” form. It is one page and extremely easy to fill out.

Although the IRS has an excellent website, you can’t download 1099 forms off of it. The official forms are still multi-layered carbon paper, so you need a physical copy. The IRS should send you the forms in the mail. If they don’t, you can order them off the IRS site or call the IRS to have them sent to you. If all else fails, you can usually find the forms at the central post office and public library locations. If you fail to file 1099s, the IRS will penalize you $50 per 1099.

More than a few people have grumbled about filling out 1099s so early in the year, but doing so has indirect benefits. You are forced to start organizing your records for 2017. 

 

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