Critical Steps That You Need to Consider When Generating 1099-MISC Forms.
As tax season approaches, you are required to ensure that the books of accounts are closed and the payment of workers paid. Following the law, if you happen to have contracted independent employees, you are required to generate a Form 1099-MISC. It may seem like a complicated procedure especially if this is the first time that you are hiring and paying the independent contractors, however with the right tools and steps in place, you will find it straightforward. The number one thing is to ensure that you have all the details for the contractors that you hired. In case you have filled the W-9 form it will be easy as the address, names SSN and EIN will be captured fast. You find that in case one of the contractors does not have a filled W-9 or in case he/she has omitted some information, it is your duty to hold 28% of the pay as accordance to IRS.
Once you have accurate details, you then need to have readable samples by the IRS to help you to generate a Form 1099-MISC. Include the amount of money that you are paying the contractor under the non-employee compensation. Lastly, you then to fill the contact details of every contractor and ensure that you use the financial software to ensure no human errors.
If you hate filling forms, then in this process, you will have to deal with your opinion because everything requires filling. The moment you have completed filling, you will not need the forms with your, but they will need to reach to the right place. The wrong mistake you can get ado here has the forms while they should be sent somewhere. Remember that the 1099 copy needs to get to a contractor before the expiry date reaches and this is very crucial. Also, for those who lie rushing the last minute, you will be risking from being charged with IRS penalties because you delayed. Filling form 1096 will be done with IRS. This is the form that is used for summarizing returns totals.
The final step that you will need to do is to get a record of the filling. Thus, if you forget to have any records of Copy C, then no way you would know what you are needed to do in case of any questions. These records are very helpful and useful especially when questions come, and they concern the info on the IRS. The entire process mentioned above is very stressful. If you are a person of a tight schedule, then this work is not meant for you, and that is why you need to hire an expert.