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.