You might be an employer who is using the services of independent contractors and hence you should concentrate more during the tax time. Although it is your firm that pays such contractors, you need to understand that they are not your employees which is why their taxes should be tacked differently from that of your workers. All employers should give out a form 1099 MISC to all the contractor who qualify. The only contractors who should be provided with the form 1099 MISC are those that are paid an amount of six hundred dollars or more per year.
It is therefore very crucial for you to provide all the contractors earning that kind of money with the form 1099 MISC. The form 1099 MISC is what the contractors use to file their annual taxes. You should ensure that there is no tax that you withhold but provide all eligible contractors with the necessary information. It is also necessary for you to know that that the same information you provide the contractors with will also be used by the IRS. While learning about issuing the 1099 form, it is important for you to start by familiarizing yourself with the deadline. It is very important for you to see to it that you have sent all the forms by the end of January of every year.
You need to understand that you might be required to pay very high fines if you do not submit the taxes by the set date. You can either deliver the forms by hand or send them by mail although you should be careful to ensure that they have been postmarked or delivered within the right time frame. The other thing you need to know is that each contractor should fill out a W-9 before you have issued a 1099 so that you can complete working on it the first time that the contractor is hired. That will help you manage to save a lot of time as well as issues that might arise as you are paying your tax.
As the ear comes to an end, you will only need to verify that all the information that has been submitted is correct. Issuing a form 1099 is very easy if you are aware of what the process entails. In order that the form can be completed, you will just have to follow a few steps. It is necessary for you to first check if the information that has been provided is the right one. The things that you will be required to submit are the names, addresses and social security or employer identification number for every contractor.