The 1099-MISC Form
Posted by Tax Man - 04/12/08 at 09:12 pmThe 1099-MISC Form
The Internal Revenue Service or IRS has different types of forms used for several purposes. The 1099-MISC form is just one of those forms and is known as informational. Since the IRS needs to track income tax returns especially when it comes to transactions made by businesses or organizations, the 1099-MISC form helps accomplish this. These forms are mainly used for independent contractors or freelancers. The form reports how much a business or organization has paid to an independent contractor or freelancer during a certain calendar year. Three copies must be made: one for yourself, one for the IRS, and one for the independent contractor who has worked for you so that they can also know that the IRS knows about the payments made. This, however, only applies to those independent contractors who have been paid more than $600 during the calendar year that is in question.
The 1099-MISC Form
Independent contractors or freelancers are those people who have worked for you but are not necessarily on your payroll. These can include website designers, gardeners, or even business attorneys. Should you fail to file a 1099 form for these independent contractors who have worked for you during the calendar year, the IRS will be able to track you down and you may get fined with more or less $100 for each form you have failed to file. This can add up to a huge amount if not taken care of. 1099 forms must be sent to the independent contractor by the end of January and to the IRS by the end of February.
