The 1099 tax designation is called as information returns. The IRS gathers them for recording payments made to individuals. Here is how you prepare the 1099 MISC form , also known as the “independent contractor” form. This form lets the IRS know the amount of revenue you have paid individuals in a particular tax year. The IRS uses this form to ensure that the individuals you have mentioned have in-turn reported the revenue generated by them in that year. If you own a business, then you can e file for business 1099.
The foresmost step in 1099 MISC form preparation is to get the correct form out of the variety of forms out there. After this, you have to buy a hard copy, the official version of this form so that it can be read by the IRS computers. They are available at big libraries, IRS offices and major post offices in your locality. You can also order online.. In case of small businesse, file w-2 online in order to avoid huge amounts of paper works.
Now, make another copy of it so that you can trial- fill it before you fill the actual form. After this, sum up all the payments that you have made to different individuals in that particular tax year. You should separately prepare a 1099 for each individual.
Enter your personal information on the form in the box provided for it in the top left. Write your name, your business’ name, your residential address, and your phone number. After this, you have to write the tax identification number of the individual concerned in the right side of the box. And below those boxes, include the name of the individual and his address.
Now include the revenue amounts. Use the row of boxes given vertically in the middle of the form.There are different specifications mentioned. For example, the first box is for rents, and the seventh is for basic services that you have taken. That is all. But before sending that, you need to fill the 1096 form that lets the IRS know what are all the forms that you are sending.