Issue Form 1099-MISC to Independent Contractors by 1/31/14
FORM 1099-MISC is used to report certain types of payments made in the course of business. If you own a business or are self-employed, you may need to submit a 1099-Misc to both the Internal Revenue Service and the person or business you paid.
Businesses must send a 1099-Misc whenever you pay an independent contractor $600 or more for the year.This includes your attorney, accountant, landscaper, web developer, graphics designer rents or computer consultant. The key is that the independent worker is self employed and not your employee. The IRS mandates that you send a 1099-MISC to each Individual by January 31st.You must also send a copy to the IRS by February 28 or by March 31st if you use electronic filing.
Many small businesses neglect to file 1099-Misc or miss a few of the independent contractors. The IRS may issue penalties varying from $30 to $250 per form.
As the payer, you complete the form and send a copy to the recipient. You also file the form with the IRS, and you may also have to file with state tax authorities.
There are a number of ways to do this:
File everything on your own. You can complete the paperwork on your own, and mail it to the self employed workers and the IRS using QuickBooks, Sage and TurboTax.
Have Kirsch CPA Group handle the 1099 forms for you. We will fill out the 1099s for you to mail to workers and do the filings with the IRS and state taxing authorities on your behalf.