Since the payments reported on the 1099-MISC, are, of course, miscellaneous, the most difficult part of filing this form is understanding what payments should be reported, who they were reported to, and when they need to be sent. We’ve broken down the particulars of 1099-MISC forms and how to prepare them, step-by-step. Before you get started… Know which employees or non-employees need to be sent 1099 forms. For non-employees to whom you paid more than $600 within the calendar year, you must send them a 1099-MISC form. Independent contractors, freelancers, and vendors, and other self-employed individuals to whom your business has made payments must be reported on 1099-MISC as well. If you have further questions regarding who should and shouldn’t receive a 1099-MISC form, it’s recommended to discuss these details with a tax professional who can point you in the right direction. Find out more about 1099 filing penalties here. When it comes to 1099-MISC forms, everyone’s talking about Box 7. What is Box 7? Should you use it? What’s the difference between Box 3 and Box 7? Box 3 pertains to prizes and awards, which could include payments to research participants, damages paid, and other prize-type awards. Specifically, Box 3 reports payments that do not fit within any of the other 1099-MISC boxes. If you’re unsure of which box to use when it comes to non-employees, Box 7 is the better choice. Write “services” in Box 7 when reporting payments made to a non-employee. Ensuring TIN accuracy If your TIN (tax identification number) details are not accurate, you’ll delay the submission of your forms and potentially incur hefty penalties. If you don’t have a taxpayer’s identification information, the IRS provides a series of steps to take in order to obtain that information. By simply checking off the TIN Checking service from eFile360, you’ll be giving yourself an extra ounce of prevention before submitting your forms to the IRS. Once you've …
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