1099 tax designations are commonly called information returns. These information returns are collected to monitor each revenue paid. Filling them out is quite simple.
Basically, this form is where you can track your revenues paid to another person for the requested tax year. For example, you would have to issue a 1099-MISC of $1,200 per year for getting the services of a lawn mower at $100 per month. IRS uses this strategy to prove that the lawn mower reported all his earning for the year.
First of, you have to know the proper form in filling up a tax designation. Make sure you are using the MISC version as there are many types of 1099 forms. IRS won’t accept unofficial copies so don’t print the ones you see online. The forms will later be scanned through special IRS computers so you really need to get the official copy. The official copies are distributed in big libraries, major post and IRS offices. Most just go directly to the IRS office. You may also order online and have it directly delivered to you.
Preparing the form is way easier than you think it is. Start by printing a copy of the form with your printer so you can just throw it away if you make a mistake. Moreover, you may have to provide a total for the payments you made to a person. If you’re reporting for numerous people, get one form for each and fill them out separately.
The form contains a top left box when you can fill up your name. Including your contact detail such as name/business name, phone number, address and email is important. Write your tax identification number next in one digit per box. Repeat the same for the right box that asks for another tax identification number but this time, write the tax identification number of the one you are issuing the form for. Then, write the address of that person at the bottom of the two boxes together with his name.
Then you have to enter the actual amount in dollars. The boxes running vertically n the middle of the form may have to be filled up by some. The “1 Rents” field is in the first box. Rentals paid have to be reported here. For basic fees paid for services within the year, report on box 7. This field is label as “nonemployee compensation.” This field is the one that’s commonly requested so if you are having a hard time classifying your report, use this field.
And viola! You have just filled out your 1099-MISC form. The very last step is to get another hard copy of the form and the cover sheet as well numbered 1069 and you’re good to go.