Steps on Filing the Form 1099
Posted by Tax Man - 06/12/08 at 09:12 amSteps on Filing the Form 1099
For small businesses who hire independent contractors or freelancers to work on their business, January 31st is a very important deadline as this is when they should file the form 1099-MISC which is a informational return also known as the “independent contractor” form. This only applies to those independent contractors or freelancers who have made $600 or more during the certain tax year in question.
Small businesses will need to figure out whom they have to issue these form 1099s to and what the Social Security Number of each freelancer is. Some businesses may find this troublesome as they tend to overlook that they would need to file this certain form to the IRS come January 31st.
Steps on Filing the Form 1099
It is important then that whenever starting work with an independent contractor or freelancer, ask them to fill out a W-9 form. This form will gather all the information you will need for a 1099 form including the information for the decision whether you will indeed need to provide them with the 1099-MISC form.
The IRS needs these forms so that they can track the income of these independent contractors and be able to track those who may be hiding their income from the IRS. Failure to file these forms can be a risk for the business as there will be fines and penalties given per independent contractor that has not been reported.
A copy of the form 1099 must be given to the independent contractor by January 31st and to the IRS by February 28th if by mail, March 31st if filed electronically.
