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How to Handle 1099s for Independent Contractors

What You Need to Know About 1099 Forms for Non-Wage Reporting

Whereas a W-2 is used to report employee wages, a 1099 captures other types of business payments. The most common 1099 you’ll encounter is the 1099-MISC, which is used to report income for independent contractors. Make sure you understand the difference between an independent contractor and an employee — and the mandatory reporting that applies.



1099 Forms and Guidelines
1099 Forms and Guidelines

If you work with freelancers, consultants and other independent contractors, you’re required to file a 1099-MISC form for any payment over $600 in the previous calendar year. Learn more about this mandatory information return and other 1099 forms that capture non-wage income.


State Filing Responsibilities

Along with mandatory 1099 reporting at the federal level, you may need to file with the state(s) in which you do business. Find out the additional state filing responsibilities that may come into play.


State Filing Responsibilities
State Filing Deadlines and Penalties
State Filing Deadlines and Penalties

Once you’ve determined if you’re responsible for filing a 1099 with your state (in addition to the federal requirement), you’ll need to manage the individual deadlines, which may vary.


Independent Contractor vs. Employee — Proper Classification Pointers

The IRS is cracking down on small businesses that misclassify workers — an all-too-common and growing problem. Get familiar with the guidelines surrounding proper classification of independent contractors to stay on the right side of the rules and avoid IRS scrutiny.


 

Independent Contractor vs. Employee — Proper Classification Pointers