If you own your own business and contract with someone who isn't your employee to do work for you, you must provide him with a form 1099 at the end of the tax year. This form shows how much you paid this person. While you can hire an accountant or a service to print your 1099s for you, you can print your own to distribute to your contractors and submit to the Internal Revenue Service (IRS).
1099 Requirements
If you pay a third party $600 or more during the year to perform work for your business, you must provide them with a 1099 at the end of the year. This includes the freelancer you hire to build your website, the neighbor you employ during a rush time to help you with a mailing or the electrician who rewires your home office. Ask each of these people to supply you with a W-9, which shows her tax ID number or Social Security number, and her correct address. Keep track of how much you pay each of these individuals throughout the year, and if the total for any one person adds up to more than $600, fill out a 1099 for him.
Forms
The IRS requires you to use their official 1099 form. This form has a scanable bar code the IRS uses to process claims. You must use the form dated for the current tax year; you can't save forms from previous years and use them. Use Form 1099-Misc for miscellaneous income. You can order the forms free of charge from the IRS online. They will ship the forms to you to complete and distribute.
Printing
If you use an accounting program such as Quickbooks, you can print your 1099s from the software onto your forms. Or open your word-processing software and download a template for Form 1099-Misc In Microsoft Word, open a new document, click Template for the document type and search for 1099-Misc. Download the template, fill it out with the correct information and print onto the IRS forms you've loaded into your printer.
Distribution
Copy A of the 1099 goes to the IRS. Keep Copy C for your records and give or mail the other copies to the contractor to use in filing their taxes. Fill out a Form 1096 to summarize the information on your 1099s. Send Copy A of the 1099s and Form 1096 to the IRS.
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