Working with Independent Contractors? Learn Who Gets a 1099-MISC Form – Small Business Trends

The 1099 miscellaneous is one of the most common tax forms. So who gets one? Typically, this form is issued to independent contractors, janitorial services, third-party accounts and other workers paid for services who are not on the payroll.

But like many IRS regulations, its not quite so simple. But there are some helpful guidelines to determine whether a 1099-MISC is needed.

Its a common belief that businesses dont need to send out 1099-MISC forms to corporations. And this is true sometimes.

In general, you dont have to issue 1099-MISC forms to C Corporations and S Corporations. But there are some exceptions, including:

You can read about other exceptions here.

If you contract with a business that is an LLC sole proprietorship, you will need to send out a 1099-MISCform. An easy way to tell is by looking at the Form W-9 your worker provided. If the W-9 indicates they are an LLC that is taxed as a sole proprietorship, you need to send a 1099. If their LLC is taxed as an S- or a C-Corp you do not (unless an exception applies as described above).

If youre unsure, its always best to file a 1099-MISC. Theres no penalty if you file one but you didnt need to. On the other hand, not filing one that is required can lead to hefty penalties.

And one more tip: Always get the W-9 before you issue payments to any vendor who may be required to get a 1099-MISC. Less-reputable vendors might not be around when you need their information at tax time.

The fastest, most efficient way to file your 1099s (and meet the January 31 deadline!) is with eFile4Biz.com. This one-stop shop allows you to easily enter your data online. Then eFile4Biz electronically files your forms with the IRS as well as prints and mails copies to your independent contractors and other recipients.

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Working with Independent Contractors? Learn Who Gets a 1099-MISC Form - Small Business Trends