By ComplyRight –
If you work with independent contractors, you have to file a Form 1099-MISC with the IRS at tax time. Essentially, the 1099-MISC is to contractors what the W-2 is to employees. It covers income amounts, while also indicating you haven’t deducted any federal, state or other taxes.
Here are answers to common questions about filing requirements:
Q: What is the purpose of the Form 1099-MISC?
A: The form is used to report payments of at least $600 to any service provider (i.e., contractor, freelancer, consultant) who isn’t an employee. If the service provided was less than $600, you don’t need to file a 1099-MISC. One monthly payment of $300 wouldn’t require you to file the form, for example. But two separate $300 monthly payments within the same calendar year would.
Q: Do I need to withhold taxes from my contractor’s pay?
A: No. Independent contractors are responsible for calculating their own payroll taxes and submitting the amount to the government quarterly.
Q: What’s the filing process?
A: Filing annual 1099-MISC forms for independent contractors is a two-step process. First you distribute forms to your contractors and then you file with the government.
Q: What information do I need from my contractor?
A: To file the Form 1099-MISC, you’ll need a Form W-9 and a Tax Identification Number (TIN) for each independent contractor. The contractor provides you the Form W-9. You should have every contractor fill out this document before services are provided. This will ensure you have the information you need to file. If you don’t have a W-9 for one of your service providers, request it immediately.
Q: When do I need to file?
A: The deadline to file is January 31, 2019. This is when you must distribute the forms to your contractors. It’s also the date you must file with the IRS – regardless if you file paper forms or do your 1099 filing online. However, you don’t have to wait until January to file. You can begin filing your 1099 forms in fourth quarter – as long the contractor has completed all work for the calendar year, and you have the required information.
Q: What’s the easiest way to file?
A: Electronically filing your 1099-MISC forms eliminates steps, saving you valuable time. Plus, when you electronically file 1099 forms, you have peace of mind knowing the IRS has received your forms because you receive verification from the agency.
Q: What should I look for in a provider of online 1099 filing services?
A: First, you want to make sure the company is an IRS-authorized e-file provider. To become an authorized IRS e-file provider, a business must submit an application, meet stringent eligibility criteria and pass a suitability check. In addition, you want to choose a partner with best-in-class security. Here are critical security questions you want to ask any potential vendor.
Q: What advantages are there with 1099 filing online?
A: Electronically filing with a reputable partner, such as efile4biz.com, is a one-stop shop. You simply enter your data, and the forms are sent to your contractors and submitted to the IRS. Plus, as part of the e-file process, efile4biz.com compiles the summary data required on Form 1096. You don’t have to prepare anything for this form. Click here to learn about additional advantages of 1099 filing online.
Q: How do I get started filing my 1099-MISC forms online?
A: Simply visit efile4biz.com to set up your free account. You only pay for your forms when you’re ready to file. Efile4biz.com allows you to print, mail, and electronically file with a simple, safe and secure solution.
About ComplyRight: ComplyRight’s mission is to free employers from the burden of tracking and complying with the complex web of federal, state and local employment laws, so they can stay focused on managing and growing their businesses. ComplyRight tracks federal, state and local regulatory activity, creates practical, affordable solutions that streamline essential tasks, and complements these solutions with educational content and actionable guidance. From hiring and training, to time tracking and recordkeeping, to labor law posting and tax information reporting, ComplyRight’s innovative products and services address the real-world challenges employers face every day.