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Filing Form 1099
Form 1099 MISC is mandatory to be filed by each taxpayer regardless of the income they earn in a tax year.

The need of Form 1099 MISC

Form 1099 covers royalties, rent, self employment or independent income, insurance and other miscellaneous incomes. In short, it gives a report on the year-end compensations given to all non-employees.

Who needs to be given Form 1099?

There are certain different forms for different individuals stated by the Internal Revenue Service (IRS) which needs to be reported by independent contractor, sole-proprietors, freelancers, etc. The Form 1099 MISC is issued by a business or a client who pays miscellaneous incomes to individuals on their services.

A client is required to generate Form 1099-MISC if the amount paid to the non-employee is more than $600 during a tax year. If the amount is less than $600, no form is required to be filed. Also, as per IRS a client has to issue Form 1099 to the non-employee by 31st January of the following year and has to file a copy of the same to IRS by the last day of February or March (as per the guideline.) It’s noted that personal payments are not included in this form.

The need of W-9 Form:

Form W-9 contains all the information about a non-employee, like his/her name, address and taxpayer’s identification like his/her Social Security number. It also has the Foreign Account Tax Compliance Act (FATCA) code and US citizenship mentioned as well. A client is obliged to get this form before generating Form 1099-MISC as per IRS.

form 1099-MISC

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