It’s October. Almost Trick a Treat and Scary things. So you want to make sure not be surprised at the end of the year. As a 1099er, it is time to start planning for when you pay your taxes. Here are some tips:
Jump-Starting the Process:
- Make a list of companies who will pay you more than $600 for the year. This includes paying you for your services, providing rewards or spot bonuses or any other income
- Get hold of form 1096 from the IRS.
- Get hold of as many Form 1099-MISCfrom the IRS’ website you need to send out. Note: These forms are also built into accounting programs like those from Xero or Intuit’s Quickbooks. If you are old school, you can get them too from your local post office.
- Remind your client (the person who hired you) to send you a 1099 (although it is responsibility:)
- Final note: Lawyers are required to pay them.
A word about Paypal:
- If you paid unincorporated businesses or independent workers electronically, such as through PayPal or a credit card, then you are not required to issue a 1099-MISC to that payee.
- If you are paid consistently via PayPal, then Paypal must send you a 1099-K forms. (I will write more about this soon)
Sending 1099s Out:
- Have your accountant or bookkeeper fill out each form (for each client you will need one)
- Use a 1099-Misc Filing Service. Here are some to consider:
- Answer key information such as:
- Your name
- Your address (even if you use your home as your business hideout)
- Your Employment Identification Number (EIN) and in some cases you might provide your social security
- Your client’s name, company name and address
- Submit in triplicate
- Mail copies to all recipients
The magic Box 7:
- Box 7 is where you list non-employee compensation
Complete Form 1096:
- Otherwise known as the “Annual Summary and Transmittal of U.S. Information Returns” form (1096 Form)
- Must to be completed for each type of 1099 you submit. Note: If only 1099-MISCs, then you only need one 1096 attached to all your forms.
- Attach all 1099s to your Form 1096 and mail them to the IRS.
- Your clients (the company) needs to mail your 1099s by January 31
- If you don’t agree with the information your employer put in the form contact him and also explain it on your tax return.
- If you receive a Form 1099, you can’t just ignore it, because the IRS won’t.
- Form 1096 and copies of the 1099s need to be mailed to the IRS by Feb. 28.
- Greatland offers extensive tax forms