The widely known information return is also called as the 1099 tax designation. IRS use the collection of these information returns to track revenues. We provide you with guidelines on how to fill them out.
Basically, this form is where you can track your revenues paid to another person for the requested tax year. A gardener for instance keeps your yard clean for $100 a month in one year is equivalent to $1,200 of 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. Then you have to make sure you are using the MISC version because there are many 1099 forms. IRS won’t accept unofficial copies so don’t print the ones you see online. The forms will later be scanned through special IRS computers so you really need to get the official copy. Official copies are readily available in big libraries, major post offices and IRS offices near you. To make sure you didn’t get the wrong copy, you to the nearest IRS Office to ask some. Another hassle-way free of getting a copy is ordering one online from the IRS website.
Preparing the form is way easier than you think it is. Make your own guide in writing by printing our your own copy and the form and filling it up. The next thing to do is add up all the payments you made to the requested person. If you’re reporting for numerous people, get one form for each and fill them out separately.
The form contains a top left box when you can fill up your name. Next, fill up you business name or name followed by your contact number, your address and email. Then, write down your tax identification number in the space provided for it. Repeat the same for the right box that asks for another tax identification number but this time, write the tax identification number of the one you are issuing the form for. Then write down the name of the person and his address below the two boxes.
Then you have to enter the actual amount in dollars. Some are required to fill up the boxes in the middle of the form but you can leave it blank if you don’t have to. The “1 Rents” field is in the first box. Rentals paid have to be reported here. For basic fees paid for services within the year, report on box 7. This is the “nonemployee compensation” field. This is actually the mot common situation so if you are in doubt what classification is your report, you may place it in this field.
And there you have it! Once you’ve filled it out, mail the form and get another hard copy of it along with form 1096 which serves as the cover sheet of the forms you’re sending to IRS.