| If you are an independent contractor, you should | | | | file the form with contractors and the IRS, but it is |
| receive a 1099-MISC form from businesses that paid | | | | under $100. In short, not enough of a fine to motivate |
| you more than $600 for your services. Ah, but what if | | | | people. If you failed to receive the form, the party in |
| you don’t receive one? | | | | question is probably not “up to” anything. |
| The 1099-MISC form is misunderstood by most people. | | | | Furthermore, you do NOT file the 1099-MISC forms |
| It is not a tax return per se. Instead, it is what is known | | | | you receive with your tax returns, so it is not a critical |
| as an information return. The IRS essentially uses it to | | | | problem for your own tax return preparation. |
| track how much revenue an independent contractor | | | | If you fail to receive a 1099-MISC form, you still have |
| pulls in from clients. | | | | to report the revenue earned from that business. The |
| A party that pays $600 or more to an independent | | | | fact it was not reported to the IRS does not mean |
| contractor must file one of the forms with the IRS. | | | | you get a free break. Sorry. You are responsible for |
| There are exceptions to this $600 figure, but this is the | | | | reporting all of your revenues regardless of where |
| general rule. A person issuing the form must send it out | | | | they came from and whether they were reported to |
| to the contractor by the end of the day on January | | | | the IRS or not by a third party. You should be able to |
| 31st. They then must file the same form with the IRS | | | | look at your books and determine how much you |
| by the end of February. If you receive a 1099-MISC | | | | were paid from each customer. |
| form, you don’t need to do anything with it other | | | | Ultimately, the 1099-MISC form stresses out more |
| than check to make sure the payments reported are | | | | people than it should. It is a necessary form, but the |
| accurate. Ah, but what if you do not receive the form? | | | | IRS is not going to be breaking down anyone’s |
| First off, many people forget to file the form. Since it is | | | | door for 1099-MISC problems. If you didn’t get all |
| an information return, they just don’t get around to | | | | the forms you were expecting, just figure out your |
| it or it slips their mind. There is a penalty for failure to | | | | total revenues and go from there. |