Businesses that retain independent contractors need to remember to file their tax forms. The 1099-MISC forms used for reporting payments made to independent contractors are due to the IRS on January 31st. The payments are to be reported in Box 7. Click here for more helpful filing tips from your friends at the Internal Revenue Service.

Generally, the IRS requires a Form 1099-MISC to be issued for any independent contractor who is paid $600 or more in any year.

How do you know whether you have to file a Form 1099-MISC? The IRS advises that if the following four conditions are met, businesses (or individuals) must report a payment as nonemployee compensation:

• You made the payment to someone who is not your employee;
• You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
• You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
• You made payments to the payee of at least $600 during the year.

Nonemployee compensation paid to nonresident aliens is reported on Form 1042-S, Foreign Persons’ U.S. Source Income Subject to Withholding (PDF), where some withholding may be required.

(Extra bonus disclaimer in addition to regular disclaimer: This is definitely not tax advice. Check with the IRS or your tax adviser to make sure you know what you’re doing.)

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.