As a business owner, bookkeeper, or accountant, you may need to file 1099 forms.
What is a 1099 Form?
Form 1099 is one type of IRS tax form used to report non-salary income for federal tax purposes. There are more than 20 variations of Form 1099, but the most common are 1099-MISC and 1099-NEC.
Non-salary income includes:
- Money from tax dividends
- Prize winnings
- Gambling and lottery winnings
- Interest income
- IRA distributions and withdrawals
- Personal property sales
- State tax refunds
- Credit card debt forgiveness
Who Fills Out a 1099 Form?
As a business owner, bookkeeper, or accountant, you are the one who fills out 1099 forms for every non-employee you pay more than $600 in a calendar year.
Who Receives a 1099 Form?
Non-employees receive 1099 forms. This is usually independent contractors or freelancers, but can also be partnerships.
Every 1099 form has five copies:
- Copy A is meant for the IRS
- Copy 1 is meant for the state tax department, if applicable
- Copy B is for the recipient (non-employee); they do not send this form to the IRS, but they do report the income on their personal tax return
- Copy 2 is meant for the recipient (non-employee) to submit to their state tax department, if applicable
- Copy C is for your records
Who Doesn’t Receive a 1099?
If you pay a non-employee less than $600 in a calendar year, then you do not need to file a 1099.
If a non-employee, such as an independent contractor, is registered as a C or S corporation, you do not need to file a 1099.
If you have employees, you will not file 1099s. Instead, you will file W-2s.
What Information Does a 1099 Form Require?
When you go to fill out a 1099 form for each non-employee you paid at least $600 last year, you need the following information:
- Their legal name
- Their address
- Their taxpayer identification number (TIN)
- The total amount you paid them last year
How Do You Get This Information?
To acquire this information for each non-employee, you need to have them fill out Form W-9 when they start working with you. This should be the first administrative task you complete after hiring them for the job. Then, be sure to keep these forms on file for all non-employees so you have all the information you need come tax time.
How Do You File a 1099 Form?
You can either file paper forms or electronically (e-filing).
At eFile360, we file your 1099 forms for you. We offer e-filing and paper filing services so you can avoid printing everything out or setting up the IRS’s Filing Information Returns Electronically (FIRE) system.
As an IRS-authorized e-file provider for information returns, we support the following 1099 forms:
When are 1099s Due?
Generally, the recipient copy must be sent by January 31. If you file with a paper form to the IRS, it must be postmarked by February 28. If you e-file, you must do so by March 31. If any of these dates land on a Saturday or Sunday, the deadline is on the next business day.
Be sure to file by the deadlines or you will be fined a minimum of $50 for each late form.
Save time and file your 1099 forms with eFile360. Create a free account at this link to get started.