If your business made payments to an independent contractor of $600 or more during the course of the year, you are required to issue a form 1099. Much like a W-2 is issued for an employee, a 1099 is sent to an independent contractor. Contractors can be individuals or companies. You do not need to send a 1099 to most corporations. The information needed to fill out a 1099 can be taken from from the contractor’s W-9. Total payment should be entered in box 7 of the 1099. The deadline for sending 1099’s is February 1 – the same date as W-2’s for employees. Penalties for missing the deadline range from $30 $100 per form. Form 1096, which summarizes the totals for all 1099s, must be provided to the IRS no later than March 31. Be sure to keep a record of all your filings. The best way to ensure correct filing is to have accurate bookkeeping and records. And always consult your accountant for further guidelines and instructions.
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