A 1099-MISC form is used by the Internal Revenue Service to track miscellaneous income in a business. If you are a small business owner, the IRS uses this form to track all payments that you made to independent contractors. Anyone that you hire to do a service for you on contract is an independent contractor.
For instance, if you outsource a web designer or a copy writer then that is an independent contractor that you pay. You only need to File A 1099-MISC Form every year if you hired an independent contractor that particular year. You should not file a form 1099-MISC for your employee, they have a wage file for themselves so do not misclassify your employees for there is a penalty.
The easiest way to file a 1099-MISC is through the online channel. You will be guided through the process of filing taxes on the site. To File A Form 1099-MISC, the first step that you take is to gather all the needed information. The information includes, the amount you paid the independent contractor, the contractor’s legal name and address and the tax identification number. In order to get the needed information, you can have the contractor fill out a W-9 form. Make a thorough check on your account books to confirm everything.
There two copies, Copies A and B when filling out form 1099-MISC. The copy that you submit to the IRS is copy A while the independent contractor should receive the copy B. It is a requirement to fill out a 1096 form if you are physically dropping off your form 1099-MISC. The other requirement is that you put the state in which your business is located. Since there is a penalty for late filing of returns, hitting deadlines will help you avoid that. Get more facts about taxes at https://www.huffingtonpost.com/entry/jct-tax-reform-bill_us_5a00b5a3e4b0baea2633fbf5.
Filing returns physically and online differs a little when you are filling the form 1099-MISC. If you want to complete the whole filing process, you need to have the FIRE system. That is the way you fill out the copy A of the form 1099-MISC then mail it to the IRS. You need to email the independent contractor for copy B.
Before you even email the form 1099-MISC, you need to ask for consent from the contractor. There is a systematic way to ask for consent from the contractor through email in order to show the IRS. You have to comply with the IRS rules and have all the requirements when sending the email. You can thereafter send copy B of the form 1099-MISC when the contractor responds by giving you consent.