Form 1099-MISC is used to record payments made by businesses to independent contractors. If you make payments over $600 to any one individual - not a corporation - in any one year, you must provide a 1099-MISC to that individual and send a report to the IRS for all 1099-MISC forms for that year. This article answers your questions about 1099-MISC forms - what they are, how to prepare one, how to report 1099 information to the IRS. You will also learn the difference between a 1099 and a W-2 (the 1099 is for independent contractors and the W-2 is for employees).
3. Form 1099-MISC vs. Form W-2 - What's the Difference?
Form 1099-MISC is used to report payments made to independent contractors and other businesses, while Form W-2 is used to report payments to employees.4. Report all 1099s to the IRS Using Form 1096
Form 1096 is used to report income paid to all independent contractors for the year. This form is sent, along with all 1099s, to the IRS by the end of February each year.
5. 1099s and Backup Withholding
Before you make payments to a 1099 recipient, you must check to see if you must withhold income taxes from that individual. First, you must ask for the taxpayer's identification number (Social Security Number, Employer ID Number, or other taxpayer ID). If one is not provided, you must withholding income taxes from payments made. Learn more in this article.
