Monday, 5 January 2015

Independent Contractors Are Always Dependent on Form 1099-Misc as Put Up As IRS Ways

IRS is here in the USA to do the rightful, purposeful, and dutiful job of tax collections for different IRS forms and one such form is 1099-MISC structured for reporting tax return for miscellaneous income and which has been normally received by millions of people across the US who are as self-employed, as independent contractors, entrepreneurs, and self-styled practitioners. This continues day after day for which IRS structured this form 1099-MISC exclusively for people who do services as consultants under part-time, unlike the employees who work in full-time to file w-2 forms. 

It is obvious that IRS ensures that people pay taxes both direct and indirect means and collects the taxes owed.IRS do this by co-ordination as matching the 1099-MISC form as they received from your client with the one you have received. It is something like a background information that IRS has a proof from your client that you have already received payments from him for the services and hence it is unavoidable that you owe tax to IRS through form 1099-MISC. Especially with IRS form 1009-MISC the independent contractors and consultants as service providers have to be careful and it is like a blade with two sharp edges and inescapable.

IMG Src: Flickr
As an independent contractor, consultant, entrepreneur, everyone will get a 1099-MISC form from the companies they provided necessary and required services for - as long as the payments were at least $600 for the prior year. Now, if they did not get anything in the mail, then they should contact their respective clients and request for the form 1099-MISC. Yes, there can be times when the form can get lost or sent to the wrong address or, the clients may have taken up their own time which becomes been late or did not even realize a form needed to be sent out! To help along with the process, as independent contractors, consultants, one should also send over a completed W-9 form.

And further what if the client still does not send the 1099-MISC forms? Well, Independent contractors still need to report the income and also simultaneously notify the IRS. Often there are enough chances in accounting of your bills being overlooked, Independent contractor should report any gross income earned even if it’s under the $600 threshold.

When an Independent contractor starts to receive the 1099-MISC forms, he can start the process of putting all bills and figures together to work for your tax return. It is needed for many independent contractors to fill-out a Schedule C to tally up the income earned and if any deductible expenses. There will also be a need to file a Schedule SE, which accounts for Social Security and Medicare payments.

Independent contractors can have the experience of perfect tax preparation software as provided by IRS certified tax partner for e-fling needs of IRS form 1099-MISC.



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