When Should You Submit Form 1099-MISC?
The IRS Form 1099 MISC is a statement that informs the IRS and other government authorities that the person identified on the form received taxable payments during the year. It's one of the IRS's key weapons in the fight against self-employment underreporting. If an employing firm fails to file a Form 1099 when it is necessary, the IRS may levy a variety of fines.
When Should Form 1099-MISC Be Filed?
The basic rule is that you must submit a 1099-MISC (visit: https://www.form1099online.com/blog/1099-misc/2020-tax-form-1099-misc-details/) whenever you pay an unincorporated independent contractor $600 or more in a year by direct deposit or cash for work performed in the course of your trade or business. You are under no obligation to disclose payments made electronically in the manner specified below.
However, keep in mind that you only need to file a 1099-MISC if an independent contractor's services are used in the course of your trade or business. A trade or business is an activity that is conducted for the purpose of profit. Payments for non-business-related services do not require you to file a 1099-MISC. This includes payments to babysitters, gardeners, and housekeepers, as well as payments to independent contractors for personal or household services. Running a home is not a money-making venture.
Although some business-related payments are taxable to the recipient, they are not required to be reported on Form 1099-MISC.
payments to companies (excluding incorporated lawyers and payments to doctors for professional services to a business), payments for merchandise, inventory, telephone, freight, storage, and other similar items, and payments to real estate brokers for rent (but the real estate agent must use Form 1099-MISC to report the rent paid over to the property owner).
WHEN SHOULD YOU FILE FORM 1099-MISC?
The 1099-MISC form is a multi-part document. The following are the components of this form and where to send them:
Copy B and Copy 2 are for the independent contractor, and they must be submitted by January 31.
Copy A must be submitted to the IRS by January 31, Copy 1 is for your state taxing authority if your state has a state income tax; most states' filing deadline is January 31, but check with your state tax department, and Copy C is for you to keep in your files.
By filing IRS Form 8809, Extension of Time to File Information Returns, you can get an automatic 30-day extension on the time to file 1099s. The IRS must receive the form by January 31. This extension merely extends the time you have to file your 1099 forms with the IRS; it does not prolong the time you have to send copies of the forms to the contractors you employed the previous year.
The majority of firms now submit their 1099s to the IRS electronically rather than on paper. If you have 250 or more information returns to file, you must do so electronically with the IRS.
Unless they opt to accept an electronic version, independent contractors must be given a physical copy of the 1099-MISC.
You can't just photocopy the form from the IRS website if you wish to file a hardcopy 1099-MISC. You'll need an original copy because it's a multi-part form, which you may get from the IRS or stationery or office supply retailers.
You can contact Form1099Online at 316-869-0948 or visit: www.form1099online.com if you have any issues with Form 1099-MISC.
