Whether you have your own small business or are working the gig economy, you need to know how to fill out a 1099 form. Anyone who is self-employed needs to report their annual earnings to the Internal Revenue Service. To learn more about how to complete a 1099 form, check out this simple guide!
What Is a 1099-Misc Form and Where Do I File It?
If you own a small business and employ independent contractors, you will need to fill out a 1099-MISC form for each person who has been paid $600 or more per year. If you happen to be self-employed, you will need to fill out a 1099-MISC form if you earn more than $3,000 per year.
In addition to any invoices or pay stubs, each contractor will receive one of these forms from each company they work for in the last year. Even if you did not get one of these forms from your company, you need to get your hand on a form and file one to avoid penalties.
How to Fill out a 1099-MISC Form
If you are a small business owner or self-employed individual, here are the steps for filling out a 1099-MISC form. They can be downloaded and printed or you can make use of an online 1099 employee form.
First Step:
Input your details in the payer section.
Enter your personal details in the box in the top-left corner. This includes the home address, contact number, your full name and any other info.
Second Step:
Enter in your tax ID number. As an independent contractor, you can use your social security number. As a business owner, you will need to use your business taxpayer ID number.
Third Step:
If you are a business owner, enter the contractor’s tax ID number, which is found on their form W-9.
Next, enter the contractor’s personal information under this box – which is also found on form W-9.
Fourth Step:
Input the account number you have assigned to the independent contractor.
The account number will only be needed if any prior 1099 forms have been corrected.
If you happen to be self-employed, the account number should already be filled out. Check the 1099-MISC form you get in the mail.
Fifth Step:
Input the money paid to each independent contractor in box 7.
Self-employed individuals just have to enter the complete amount earned from the employer in box 7. The employer should have filled this out, but check to make sure.
Make Sure You Know the Deadline for 1099’s and How to File Them
When it comes to 1099, one copy needs to be sent to the IRS, one to the state tax department, one to the contractor, and one for your records. January 31st is the IRS deadline for filing your 1099 forms.
Small business owners must also submit a 1096 form. This form lists every 1099 form submitted for each independent contractor. The 1096 form must also be submitted by January 31st and should note the total amount paid to each contractor in the year.
Knowing How to Fill out a 1099 Is Very Useful
Owning a small business or being self-employed comes with many benefits. However, you need to know how to fill out a 1099 to avoid trouble with the IRS. Check out our website today for more articles like this!