How to Prepare 1099 when you employ independent contractors?

In this tax season, let us check on how to close the tax books and to prepare the tax documents. When you employed an independent contractor and paid them $ 600 or more for their business service, you need to prepare and issue the Form 1099 MISC to the concerned individual. IRS Form 1099 MISC IRS 1099 MISC Form accumulates a person’s income from all his / her non-employee compensation. The independent contractors use this Form 1099...

How To Make Corrections To Form 1099-MISC Form

Form 1099 is one of the IRS forms that are used by the tax filers to report any specific types of payments. It contains a series of the informational returns identified by a letter, consists of the forms ranging from Form 1099-A to Form 1099-SA. Business owners use the IRS 1099-MISC Form in order to report the money paid to the independent contractors. Form 1099-MISC contains the information about the business and the independent contractor you paid....

IRS debuts draft of 1099-NEC for 2020 to Replace 1099

Recently the IRS released the draft of 1099-NEC, which is considered to be the replacement of Form 1099-MISC Box 7 to report the non-employee compensation and Box 9 to report the direct sales about $5,000 or more. The NEC can reduce the confusion that caused after the passage of PATH Act in 2015. As per the PATH Act, the deadlines to report to report Form 1099 MISC Box 7 is dated from 31st March to 31st January....

Know about the Series of All 1099s Forms – IRS 1099 Forms

IRS Form 1099 is used to list various types of income that you receive apart from your salary or wages throughout the financial year. It is mandatory for every tax payer to report their extra income to IRS. Form 1099 is used to list the payments that you receive through the interests from bank, dividends from stock investments or payment for your freelance work. Note that, everytime you receive a form, IRS also receives a copy of...

1099-K vs 1099-MISC—What’s the Difference?

When you are self-employed or working on a contract basis without withholding the taxes, then your income will be reported under different tax forms like: 1099 MISC Form or 1099 K Form. Consultants or freelancers who receive $600 or more during a tax year can receive 1099 MISC form, on the other hand a freelancer who works on-demand economy such as Lyft or Uber will receive 1099 K Form. So in this article let us find the...

How to Report and Pay Taxes on 1099 Income with Appropriate Form

When you have received a 1099-MISC from the person who paid you for your service that you did during the last tax year. Now what to do with the 1099-MISC form will be a question. To know better read on the article. What Do If you receive 1099-MISC Form? 1099-MISC form is to report amounts paid to the non-employees ( independent contractors, freelance workers, and other businesses to whom payments are made) Non-employees get 1099-MISC each year...

Requirements for Properly Completed IRS 1099 Forms

Before filling your forms to the IRS, as a tax filer, you must know the basic requirements for completing the forms. So that you will minimize your errors and you are limiting re-filing. IRS 1099 form consists of varieties of forms that are used to report your income. But, in this blog, we are going to understand what are all the required information you need to collect before filing. Before jumping into the requirements section, let us...

Independent Contractor Must Know About 1099 Tax Deductions

If you earn money as an independent contractor, the IRS considers you as a “business of one”. It is similar to a company that withholds the taxes automatically from the employee’s paychecks; here you need to withhold your own taxes. Having said that the independent contractor is like a business of one, you also get the expenses deductions such that you can lower the tax amount you pay to the IRS. You can itemize the deductions that...

What To Do If You Receive a 1099-K Notice From the IRS?

Form 1099-K is an information return, which is provided to the merchants who have 20,000 or more transactions and summing more than $ 200,000 during the tax year through debit or credit cards, else through electronic payments like Paypal. Financial institutions like a bank will process the payments and send a copy to the Internal Revenue Service. The IRS has started utilizing the information on the Form 1099-K to question if the merchants are reporting their income...

How to Correct 1099 Forms Already Transmitted to the IRS?

To err is human. Everyone out there makes a mistake at some point in time. However, the ultimate thing is to correct the committed mistake. As a tax filer also you can commit some mistakes while filing 1099 tax forms. It is common and the IRS understands the situation better and gives a chance to correct the submitted forms. There may be a condition where you find the mistake after submitting the form to the IRS. So...