One of the most common reasons for receiving a 1099-Misc is that you are self-employed or worked as an independent contractor at some point during the year. In most cases, clients are required to send you a 1099-Misc reporting form if you made over $600 with them in that tax year. There are sometimes when that is different, but not often.
As a self-employed professional, you are required to report everything you made on that 1099 during tax season, just as you would be if you filed a W-2. However, it is a little different when you are filing a 1099-Misc reporting form than it is when you are filing a W-2. With that being said, read on below for some of the basics of 1099-Misc reporting.
Taking Deductions on a 1099
One of the great things about filing a 1099 over a W-2 is the deductions you can claim on your Schedule C. Of course, the deductions must be ordinary business expenses, meaning a gold necklace for your girlfriend cannot be deducted on your taxes but your office supplies can be. For example, a ton of expensive computer graphic equipment is considered necessary for someone in the graphic arts field, however, hiring a limo to dazzle a client will not be considered a necessity but a luxury instead and not a deduction to be put on your taxes.
Self-Employment Taxes on a 1099
As a self-employed contractor, your social security and Medicare taxes still have to be paid. However, you are required to add up and pay these taxes yourself; it will not be done for you. You should make sure to attach a copy of these taxes to your form when you file your taxes during tax season and turn them in.
Estimated Tax Payments on a 1099
One thing about working with a 1099 is that your employer will not take taxes out of your check like they do with a W-2. You are required to take care of these things yourself and should do so wisely. This also doesn’t mean that you can wait
and just pay the taxes during tax season. Sometimes you are required to pay your taxes four times during the year. The best thing to do is contact a tax professional and see what the best way for you to go is when it comes to filing your taxes when you are using a 1099.
Online or Professional Filing
There are two ways that you can file your 1099-Misc. You can file online or you can go to the professionals and have them take care of it for you. It is best to make a list of the pros and cons of each and then decide which is the best route for you and your business.
These are just a few of the basics of 1099-Misc filing that you will need to know for help throughout the year and into tax season. If you have questions, the professionals at Wage Filing will be happy to help you.
IRS e-filing gives taxpayers the option to file their taxes online using prepared software approved by the IRS, download filing forms for free off of the IRS’s website, or find and work with a tax filing professional that has been authorized by the IRS. This is somewhat like websites that help individuals and businesses file their taxes online, except you are working directly with the IRS.
If you are part of a business or are self-employed, you will want to sign up to be an authorized e-file provider. This means that you, along with anyone else you might have worked with in the most recent taxable year, will be able to file your taxes in one place. This makes the process really simple when it is time for you to gather all of the information needed to report your taxes to the IRS. You will have all of your clients and employees’ personal and income information all in one place, which will make it so much easier for you to review and send out.
Depending on your business structure, you will be able to choose the best software for you and your company. You will then be able to file your taxes online and gather all information needed from clients or employees to turn into the IRS. Working with an e-filing service will also make sure that there are no mistakes so that you can receive a better tax refund.
Whether you are self-employed, part of a partnership or corporation, a charity or a non-profit organization, or want to become an authorized e-file provider, the IRS’s website makes it easy to navigate through these options. For each area of business, you will be able to see all forms involved in that business entity, as well as FAQs, contact information, and the ability to see the status of your e-filing.
The IRS is very forgiving for first-timers, which means that if you are unsure of where to start, they will be able to help you with explanations of the process and information regarding certain business structures. The IRS also offers taxpayers the opportunity to free tax preparation help. If you decide to file your taxes on paper, the IRS offers free filing papers for you to print out so that you can do them in the comfort of your own home instead of online.
Impacts on Taxes
Just because you know which business model you follow and how many forms you are expecting from your employees does not mean you are overlooking something. There are many different life events that can affect how you file your taxes, which are all outlined on the IRS website.
These events can include dependents, spouses, divorce, your health, losing your job or getting a new one, casualties, disabilities, and more. Before filing your taxes, think about if any of these life events pertain to you. If so, you will need to read the guidelines on how to file to account for these things. This can make the process overwhelming, which is why the IRS has also included links for assistance.
E-filing with the IRS can be a good idea, especially if you are looking for an in-depth, yet simple way to file taxes. Once you get the hang of it, you can become an e-file provider and work with another filing site like wagefiling, which is dedicated to helping individuals and businesses file easily.
Elance and Odesk are both websites that employers can use to connect with those who are looking for freelance work. Freelance work is similar to the work contractors do because both are given a fixed pay for work that is done within a timeframe. After that work has been completed, they are no longer connected to the company unless the company wishes to rehire them for another project. If you are looking to hire someone from either of these websites, there are some forms you will need to complete for the next taxable year.
The W-9 form will include all of the freelancer’s personal information including their Social Security Number, their Taxpayer Identification Number (TIN), and their full name. This is important for employers because it will help them get other forms started without having to continually ask the freelancer for more information.
A 1099-MISC form is filled out by an employer or a client that pays a freelancer for their work. The freelancer must earn $600 or more for the 1099-MISC form to be reported to the IRS. A new 1099-MISC form must be filled out for every new taxable year. If a freelancer has worked with a handful of different companies or clients in the past year, the company must fill out a separate 1099-MISC form for each project the freelancer was hired for.
Once a freelancer is able to gather all 1099-MISC forms for that year, they will be able to see how much they owe in taxes. As a company or client, keep any receipts or written agreements made with the freelancer so that it is easier to fill out the 1099-MISC form for that taxable year. This form will then be sent to the IRS and a copy should go to the freelancer so that you are both on the same page.
A 1040 form is used to report all income made through self-employment. A freelancer must also report any tax deductions so that they can determine the refund amount they will be receiving for that taxable year.
All income must be reported on a 1040 form unless it is tax-exempt, which can be figured out between you and your client. The amount of tax you owe should be calculated using the grid on the instruction page or if you file online, the tax owed will be done automatically. The 1040 form is the most basic version of this form, but depending on the type of work you do, you may need to fill out other forms in conjunction with the 1040 such as the 1040A, 1040EZ, or 1040NR.
Sites like wagefiling help freelancers by consolidating all reporting forms in one place and making it easy to fill them all out. Once the forms have been filled out, they can be sent to the IRS right away so that there is no chance of defaulting on your taxes. Wagefiling also lets freelancers keep all past documents in an organized place where they can be saved to your computer or printed out. These forms can be referenced later for future tax reporting, as well.
Contractor filing can sometimes be difficult to understand because there are certain requirements that each contractor and employer must follow in order to make sure the forms are completed. Understanding the process is the first step to making sure you complete the forms correctly.
Who Needs to File
Companies that have hired independent contractors in the last year must file a 1099-misc form for each contractor in the upcoming taxable year. 1099-misc forms must be filed for any contractor that made $600 or more in the past year and works independently. Before the 1099-misc forms can be reported, each contractor must fill out a W-9 form, which includes their Taxpayer Identification Number (TIN), as well as other personal information. Any contractors that are a part of a corporation, a limited liability company (LLC), or a limited liability partnership (LLP) do not have to report as an independent contractor.
Forms Needed for Independent Contractors
The first form every independent contractor needs to fill out is a W-9. As stated above, the W-9 form includes personal information such as a TIN, Social Security Number, and the contractor’s full name. This form is important because it will be instrumental in making sure that the 1099-misc form is filled out properly. The W-9 forms must be turned into the employer so that they can begin contractor filing. Once the W-9 forms have been filled out and turned in, the employer must fill out a 1099-misc form.
The purpose of this form is to record all payments that have been made to each independent contractor in the most recent taxable year. The reason each contractor needed to fill out a W-9 form first is so that the employer has all the correct personal information needed to finish the 1099-misc form. Once these forms have been filled out, they can be sent to the IRS for that taxable year. Copies of the 1099-misc and W-9 forms should also be made so that employers can keep them on file in case a problem arises.
How to File
Contractor filing is done more easily through an electronic filing website such as Wage Filing. By doing your reporting online, you are saving paper, as well as getting the forms filled out more quickly. Sites like wagefiling let you upload previous information each year so that when it is time to file your taxes online, part of your forms are already done. Filing online is also a better idea than filing on paper because you are more likely to keep your forms organized and easily accessible online.
Things to Remember
An independent contractor is responsible for paying their own income taxes because they do not work for a corporation or limited liability company. If the IRS sees that a contractor has not paid their federal taxes for the most recent year, the contractor’s employer is responsible for paying these taxes. Because independent contractors are usually only hired for a set amount of time, it is important for the employer to keep track of all forms and contractors they have hired. This applies to contractors, too who act as employer to other contractors.
Once you understand the process of filing, you can get started online. Wagefiling can help you get started with easy to use tutorials and forms that can be filled out on the website instead of downloading software.
Many people debate whether to file their taxes online or to continue filing on paper. Some feel like filing on paper is better because putting your personal information online is not always a good idea. That said, websites devoted to helping people file their taxes online are very secure and make sure that your information is seen by no one except the IRS. Filing your taxes online comes with even more benefits, as well.
When you file your taxes online, your information is better checked for errors. No matter how hard you try, you can still make little errors on your forms that you might not catch before sending them off to the IRS. To make sure this does not happen, file your taxes online instead. The filing software will work with you to make sure that all of your tax information is correct before you even fill out a form. Then, the filing software will walk you through each step to make sure that all parts of the correct forms are filled in; the software will make the process even easier by keeping questions simple and doing calculations for you.
Save Yourself Time and Money
Filing taxes is not easy, which is why so many people hire professionals to do it for them. That said, hiring someone to help you file your taxes could get expensive. By filing your taxes online, you can save yourself time and money. The process is simple enough to work through yourself and a tax filing website will save your information so that you can easily access it during other taxable years. Once you are finished filing your taxes online, the software will send them directly to the IRS so that you can be sure there is nothing else you will need to do later.
Receive Better Refunds
Having a software help you file your taxes makes sure you are not making any mistakes regarding entering personal information or making calculations. Once your taxes are filed electronically, you can request to receive any tax refunds with direct deposit. This is a better option than filing on paper because you will know that the IRS has received all your paperwork and that your refund is on the way. Some filing programs even have a feature that will alert taxpayers of any additional tax benefits or deductions that might be available. This benefits anyone looking for a bigger tax refund.
Get Smarter about Your Finances
When you pay a professional to file your taxes, you are removing yourself completely from the process. By doing your taxes online, you are giving yourself the opportunity to learn about your finances and better ways to save money. The filing process is easy to understand so you are less likely to get confused about what to do.
The benefits of filing your taxes online speak for themselves. Another great benefit is the green effect. Filing online saves you the paper it takes to fill out all of your information on, the stamps, and the packaging you need to send it off to the IRS. Use these benefits to think logically about how to file next year.
If an employee or contractor fails to provide you with the correct information on their W-9 form, it can delay the process of getting their 1099-MISC form completed. A Tax Identification Number is an identifier that helps the IRS understand which form goes with which contractor, employee, or business. Each person or company has their own TIN and without it, forms like the 1099-MISC form cannot be reported. A person can verify another person or business’s TIN without permission, unlike a Social Security Number, which is private.
When Filing for Tax Exemption Status
If your organization or your business is trying to file for tax exemption status, it is important to have a valid tax identification number. Organizations that are dedicated to serving the public are usually the common reasons for tax exemption status. Organizations like this include places like churches and other religious places of worship, or charities.
Tax exemption status means that for each taxable year, an organization pays a reduced amount of their taxes than other companies would. This status can be revoked if an organization lies about or is unaware of the validity of their tax identification number.
Establishing a Business
There are many business structures you can use when establishing your own company, but if you have an invalid tax identification number or no TIN at all, your choices for business structures are severely limited. Those without tax identification numbers are not allowed to establish a corporation or a partnership. This also means that business owners will not be exempt from taxes. If you are looking to establish one of these businesses, make sure that your TIN is valid.
This will be helpful when hiring employees, as well. When it is time for you and your employees to file your taxes for the most recent year, you will all need a TIN for yourselves as individuals, as well as the tax identification number for the business. Without it, the IRS will be alerted that your company is not a legitimate corporation or partnership, and you could lose your tax exemption status, among other things like the protection of your assets and liability from debt.
If you are self-employed, otherwise known as a small business owner or an independent contractor, you should think about setting up your own retirement plan. With a retirement plan, you can start saving up for a pension plan and a 401(k). Because the filing process for a retirement plan is different for self-employed individuals, each person should have a tax identification number so that their unincorporated company can sponsor their retirement plan. Without a TIN, you will not be able to enjoy these benefits.
When you are ready to check you TIN, go to wage filing’s website. With their TIN checking services, you can make sure there are no mismatched TINs with names or companies. If there are, you can also see what kind of penalties are set by the IRS, which can help you prepare for any complications with your clients or employees. Wage filing is very reliable and professional, so you can be sure that all of your information is kept private.
A 1099-MISC form is used to report all income made by a contractor, as long as it is $600 or more for one taxable year. The 1099-MISC form must be filled out by the employer or client who hired the contractor. One of the most important parts of the 1099-MISC form is the Taxpayer Identification Number (TIN), which makes it easy for the IRS to identify which contractor the form is for. Without the tax ID, the 1099-MISC can be harder to file, but it is not impossible.
Request a W-9 Form be Filled Out
If you have not already done so, contact your contractor and officially ask them to fill out a W-9 form. A W-9 form will have all personal information including the TIN and Social Security Number of the contractor, which can be used to finish the 1099-MISC form. If you have already given the contractor a W-9 form to fill out, but have not received it back yet, record the dates and efforts you made in trying to solicit this information. The IRS is prepared for this situation so as long as your explanation for why the contractor has not given you a TIN is legitimate, you should not be penalized.
Use an SSN in Place of a TIN
If the contractor has not given you a TIN, but has provided you with their Social Security Number, this can be used in place of the TIN. Since the two numbers are similar, the IRS will have no problem identifying the contractor. The only drawback to this is that if the contractor has yet to turn in a W-9 form, neither number will be available for you to use. This is why it is so important to make copies of W-9 forms for each contractor for previous taxable years so that when it comes time to fill out the 1099-MISC forms for this year, you do not have to solicit the same information again.
File the Forms without a TIN
Since you will be subject to fines if you choose not to file the 1099-MISC form until all information has been received, it is better to report the forms anyway. Do this by logging all zeros where the tax ID should go. This will alert the IRS that the form is not fully completed and they will then contact you. Once they have contacted you looking for the tax ID number, you can explain how you tried to receive the information from the contractor and show the IRS the records you kept of your attempts. This will show them that it is not your fault and you will not be fined or penalized for your efforts. Doing this makes the process of tax filing a little more stressful, but it is probably your best bet if you are dealing with a contractor who is not willing to comply with you.
Keep your records and past forms for contractors organized by using an online filing site like wagefiling. Wagefiling will make it easier to fill out basic forms like the W-9 and 1099-MISC, and will send off documents to the IRS as soon as they are done so you are not fined for turning in forms late.
The Affordable Care Act (ACA) is a healthcare reform law. Also known as Obamacare, it aims to provide more Americans with affordable healthcare insurance. The Affordable Care Act is also meant to improve the quality of current healthcare in America. The ACA wants to help Americans by protecting them from insurance companies taking all of their money with low quality healthcare in return. New in 2015 are ACA reporting forms. These ACA reporting forms are intended for employers that provide health insurance coverage for workers.
Requirements for Reporting Forms
An employer must provide information for basic healthcare coverage per month for each employee, spouse, and dependent. If an employer has more than 100 full-time workers, they are going to have to do a little extra paperwork; this includes any supplementary information about the amount of coverage and the availability of the healthcare. If a business is small, they will have to fill out both a 1094-B transmittal and 1095-B form. If a big business is reporting ACA forms, they will have to fill out a 1095-C form and 1094-C transmittal. Both the ACA reporting form and the transmittal will be sent to the IRS, which is better explained on the IRS’s website. Employees must provide all information found on a W-9 form in order for the 1095-B or 1095-C forms to be completed, as well as information from spouses and dependents.
How to Get Started
Information from all employees is the most important part of an ACA form, which can be taken from individual W-9 forms. The IRS is giving employees a chance to do a test run for the ACA form filing process, which means if you get it done on time, there will be no penalty. An employer should get the Social Security Numbers from all dependents and spouses sooner rather than later because those can be the hardest to receive. An employer must also gather all healthcare coverage for each person each month they are covered. Full-time and part-time employees will have different coverage plans, so make sure all information is recorded.
Make It Easy
The IRS wants people to start filing their ACA forms this taxable season since the forms are due next tax season. Make this process easy and painless by filing online with WageFiling. You can keep track of all records and documents you receive, which you can use to complete the necessary items needed to report each ACA form.
Especially if you are a part of a big business, it can be very difficult to keep track of which employee has finished their W-9 form and what stage you are in the filing process. WageFiling even makes it easy to save documents for your personal records so that if you are in the same situation next year, you can easily find dependent and spouse information, as well as employee information. This will make it much easier for you to finish next year’s ACA reporting.
Wage Filing is inexpensive and easy to use, which is why it is one of the most popular e-filing websites. If you have any questions about the process or concerns about the security of your documents, contact their customer service representatives or check out the about page today for more information.
A 1099-MISC form is a form that records payments of $600 or more made that year to a contractor. One of the elements that need to be present on a 1099-MISC form is the taxpayer identification number. The taxpayer identification number (TIN) is a number used to identify a person for tax purposes. This TIN is used by the IRS to make sure that your taxes have been filed correctly. The TIN is more than just one number, however; the TIN is a bunch of information including the employee’s SSN and other identifiers that will be used when filling out a 1099-MISC form. If your contractor does not provide you with their TIN, there are a few things you can do.
Have the Contractor Fill Out a W-9 Form
The W-9 form is used to request the contractor’s TIN and other personal information. Once the W-9 form is returned to the company or employer, the employer can take the contractor’s information from the W-9 form to complete the 1099-MISC. If you have a contractor who has not completed the TIN section of the 1099-MISC form, you can request that he or she fill out a W-9 first so that you can finish the 1099-MISC form on your own.
Avoid Fines and Penalties from the IRS
Leaving the TIN section blank on a 1099-MISC form is cause for a fine. If one of your contractors does not provide you with a TIN or SSN, then you will have two options to choose from. You can either wait for the forms to come back completed by the contractor with all the necessary information on it or you can file the 1099-MISC form with the TIN section left blank, but turned in on time. If you decide to file the form late, you will get a fine, but if you file the form on time with the TIN section blank, the IRS will contact you and you can show them that it was done for a reasonable cause.
When working with any employee, it is important to keep all of their records in case you need to finish reporting any forms on your own. It is also important to keep records of you requesting that the contractor complete the 1099-MISC form or provide you with their TIN. These records will need to be shared with the IRS after they contact you so that you are not subject to a fine for not completing the forms. As long as you have reasonable cause for leaving the TIN section blank on the 1099-MISC form and proof that you did in fact request the information from the contractor, you will not be penalized.
Work with WageFiling to make sure the forms for all of your employees are complete and turned in on time. You can even refer back to old W-9 forms and 1099-MISC forms from your WageFiling account in case you run into trouble with one of your contractors. When working with WageFiling, make sure you save all documents for your own records so that you do not need to go through the same thing next year.
A 1099-B form is a form that is issued by a broker in order to give an overview of all transactions made regarding stocks, bonds, mutual funds, and securities, as well as any gains or losses. All of these stock transactions must be reported to the IRS in order to successfully file your taxes. A 1099-B form must be reported for each sale your stock transactions make. If you choose to create a consolidated tax statement, it is possible that you would see more than one sale if that is what your records show. Compare your records with the 1099-B form so that you know all information is correct.
What is Included in a 1099-B Form?
A brokerage firm or barter exchange must report all stocks, contracts, commodities, securities, and anything else that he or she has sold for liquid cash. Each transaction must be reported on its own individual form for the IRS. The guidelines for a 1099-B form have change slightly in the past few years; for example, both short-term and long-term sales must be reported, which was not the case a few years earlier. Brokers and barter exchanges should remember that they do not have to report anything from organizations who give to others, IRAs, corporations, and the like, all of which is explained on the IRS’s government website.
Why Do I Need a 1099-B Form?
The IRS requires investors and brokers to report the original value, or cost basis, of financial securities for the last taxable year. A cost basis is defined as the value of an asset, such as stocks, bonds, mutual funds, or commodities that needs to be reported in order to file taxes. It is important to report the exact amount of expenses and income for the most recent taxable year; otherwise, you could end up owing the IRS too little or too much in taxes. Just like any other form that needs to be filed for tax purposes, the 1099-B form requires the broker or barter exchange to provide information about each client including their Social Security number and sales made with that person.
Forgetting to Report a 1099-B Form
If you are a broker, you will send the 1099-B form to each of your clients for them to fill out for you. If you are a client, be prepared to fill out a 1099-B form for each taxable year you are working with your broker. It is important to get your 1099-B form turned in before the deadline, however if you forget to report your 1099-B form or are delinquent in returning it back to your broker, the IRS has guidelines on how to deal with that. The IRS requests that anyone who has forgotten to file a 1099-B form fill out an amended tax return using the 1040X form. This form is used to report the correct amounts that would have originally been on your 1099-B form. You should turn in the amended tax return as soon as possible in order to avoid any penalties or additional fines from the IRS.
When you are ready to file your 1099-B form, use WageFiling to make it easy for you. With a simple and user-friendly interface, WageFiling can help you upload, fill in, and send off all the documents you will need to report for the most recent taxable year. You can also look back on old forms and save them for your records so that you always stay organized and in control.