IRS Form 1099-MISC Information and Instructions
Form 1096, a transmittal form, is the cover page for the 1099s that will be submitted to the IRS. The 1096 summarizes the total payments included on all of the 1099s.
First step is to determine who is an independent contractors and who is an employee. The IRS Publication 15, also known as Circular E, The Employer's Tax Guide gives some criteria to help with this determination. If it is determined the individual is an employee, see this page for the
correct IRS payroll tax form
to send them.
Third Step: Preparing a 1009-MISC. The period for which you report payments is the calendar year, not your fiscal year. The forms must be "furnished to recipients” by the end of January and to the IRS by the end of February. Rents are reported in box 1 of the IRS form 1099-MISC. Payments for services subject to self-employment tax (FICA and Medicare) go in box 7 - Nonemployee compensation. Services include independent contractors who provide a service. Some examples of independent contractors include: repairmen, accountants, attorneys, cleaning services, and lawn care services. Do not send 1099-MISC’S to corporations. One of my readers spoke to an IRS agent regarding this subject. This was the IRS agent's reply: "1099-MISCs are not required for payments to electricians, plumbers, or similar SE individuals who are coming in for a short-term job. For example, a plumber who comes in to install or repair the bathroom sinks, does not require your business to distribute a 1099-MISC. Independent Contractors who should get a 1099-MISC are non-employees who are hired for a longer period. For example, your business hires Mr. X and Mr. Y for three months to build a garage. They should be provided with an IRS form 1099-MISC. (Thank you Roy Lainson for obtaining this clarification for us.) You should not pay an independent contractor until you have received a completed and signed W-9. Use Form W-9 "Request for Taxpayer Identification Number and Certification" to obtain names, address, and taxpayer identification numbers (SSN or FEIN) from people you will be required to provide 1099-MISCs. Have all independent contractors fill out a W-9 even if you think they are incorporated. If they are, there is a place on the W-9 for them to indicate they are incorporated.
Click here to view instructions for the IRS form 1099-MISC. *Notice: You cannot download
usable 1099 and 1096
from the web! The original that’s filed with the IRS is printed in red ink and is read by a scanner.
You can order forms from the IRS at no charge, or purchase them from an office supply store. You can reach IRS at 1-800-TAX-FORM to request the ones you need. Return to BasicAccountingHelp’s Home Page from 1099-MISC
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