1099 tax designations are commonly called information returns. They are collected by the IRS to track the revenues that are paid to individuals. Below is a guide on how to fill it out.
Also called as the independent contractor form, this form shows how much you have paid someone for the questioned tax year. Suppose you have a gardener and you pay him $100 for one year to render gardening services, you would have to issue $1,200 as 1099-MISC. IRS uses this strategy to prove that the lawn mower reported all his earning for the year.
In filling up this tax designation, you must first know the right format. Make sure you are using the MISC version as there are many types of 1099 forms. There are printable versions of this form in the internet but none of them will be honored. The forms will later be scanned through special IRS computers so you really need to get the official copy. You may get an official copy in libraries, post offices as well as the IRS offices in all branches. Ask an official copy in major post offices, IRS offices and in big libraries as well. The IRS website has a system where you can order the official cope online for delivery. Look up How to Fill Out A 1099-MISC Form online for more info.
IRS made the filling out of forms a lot easier. One tip is to print your own copy of the form so in case you make a mistake, you don’t have to throw the official copy. Then compute the total amount you paid to the people you are making the report for. One form is only for one person and f you are reporting for several people, get different forms for each of them.
The form has a top left box for your name, write your name on it. Then you have to fill up your general information including your name/business name, phone number, email address and address. Write your tax identification number next in one digit per box. Then write the tax identification of the person you are issuing the form for at the box in the right side. Then, write the address of that person at the bottom of the two boxes together with his name. To know more, check out: Fill Out 1099-MISC Form.
The next thing you do is enter the total amount in dollars. The boxes running vertically n the middle of the form may have to be filled up by some. The “1 Rents” field is in the first box. Rentals paid have to be reported here. If you are reporting for a basic fee for the services rendered to you in the year requested, use box 7. This is the “nonemployee compensation” field. This field is the one that’s commonly requested so if you are having a hard time classifying your report, use this field.
Once you’re done, you may send it and get another hard copy of it together with form 1069 or the cover sheet for your form.
Learn more about tax preparation in the US by going to https://en.wikipedia.org/wiki/Tax_preparation_in_the_United_States.