The widely known information return is also called as the 1099 tax designation. IRS use the collection of these information returns to track revenues. We provide you with guidelines on how to fill them out.
Also called as the independent contractor form, this form shows how much you have paid someone for the questioned tax year. For example, you would have to issue a 1099-MISC of $1,200 per year for getting the services of a lawn mower at $100 per month. IRS uses this strategy to prove that the lawn mower reported all his earning for the year.
Knowing the right form is essential upon filling up the 1099-MISC. There are various types of 1099 forms and when filling out, be sure to have the MISC version. IRS won’t accept unofficial copies so don’t print the ones you see online. The official version must be the one you will fill up because it is the only paper that is readable to IRS computers. The official copies are distributed in big libraries, major post and IRS offices. Ask an official copy in major post offices, IRS offices and in big libraries as well. You may also order online and have it directly delivered to you.
IRS made the filling out of forms a lot easier. Start by printing a copy of the form with your printer so you can just throw it away if you make a mistake. The next thing to do is add up all the payments you made to the requested person. If you’re reporting for numerous people, get one form for each and fill them out separately.
The form has a top left box for your name, write your name on it. Then you have to fill up your general information including your name/business name, phone number, email address and address. Write your tax identification number next in one digit per box. Repeat the same for the right box that asks for another tax identification number but this time, write the tax identification number of the one you are issuing the form for. Then write down the name of the person and his address below the two boxes.
Now write down the total amount. The boxes running vertically n the middle of the form may have to be filled up by some. The box that appears first is the “1 Rents” field. If you are reporting for a paid rental, you may write it here. For a basic fee paid to someone for his services, put your annual report on box 7. This one is for the “nonemployee compensation.” Use this field if you don’t know that classification of your report as this is the mostly used field.
Once you’re done, you may send it and get another hard copy of it together with form 1069 or the cover sheet for your form.