The widely known information return is also called as the 1099 tax designation. IRS use the collection of these information returns to track revenues. Below is a guide on how to fill it out.
Basically, this form is where you can track your revenues paid to another person for the requested tax year. For example, you would have to issue a 1099-MISC of $1,200 per year for getting the services of a lawn mower at $100 per month. This way, IRS keeps track of the revenues reported by the gardener.
Knowing the right form is essential upon filling up the 1099-MISC. There are various types of 1099 forms and when filling out, be sure to have the MISC version. 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. 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. Moreover, you may have to provide a total for the payments you made to a person. One form is only for one person and f you are reporting for several people, get different forms for each of them.
Write your name on the top left box of the form. Next, fill up you business name or name followed by your contact number, your address and email. Get your tax identification number and write it down on the boxes. 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 the address of that person at the bottom of the two boxes together with his name.
The next thing you do is enter the total amount in dollars. The remaining boxes in the middle form are to be filled by some but if you don’t know what’s asked, just leave it blank. The box that appears first is the “1 Rents” field. Paid rentals that has to be reported shall be provided in this field. For a basic fee paid to someone for his services, put your annual report on box 7. This field is label as “nonemployee compensation.” 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.