Needing the Scoop on 1099's? It doesn't have to be complicated! Read on to find out if your business should file them, just who get's one, and the easiest way to do it!
Question: Should you file 1099's?
Answer: If you are engaged in a trade or business you are required to file 1099's.
Question: Who receives a 1099 from me?
Answer: Without over complicating it, you will give a 1099 to:
Independent contractors (not employees) that performed services over $600 to you during your fiscal year. Examples would be your Bookkeeper, Janitor, Computer Technician, etc.
Payments made for Rent
Proceeds over $600 paid to an Attorney
For a comprehensive list click here.
Question: Easiest way to do it?
Answer: I highly recommend making it a practice to provide any new vendor (or someone you are going to make a payment to) with a Form W-9 to fill out before they receive payment. A W-9 form does not need to be sent in to the IRS but it gives you the pertinent information to complete the 1099 at year end.
When you are ready to file the forms I would stay away from the pesky 3 part form nightmares. For the past 3 years I have used an online service.
They haven't paid me to say this but it has been a lifesaver. The cost is relatively inexpensive and I can keep track off all my vendors that require a 1099 in one place. It allows you to easily email the 1099 and verify that the vendor received it. Lastly, it keeps track of the deadline dates with the IRS and e-files for you! Kind of like magic...
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