You know which tax forms you have to file for yourself and your employees.
Do you know the filing rules for the contractors you work with throughout the year?
“If during the calendar year you hired contractors in the course of running your trade or business, you may have to issue them a 1099-Misc,” Ray Martin wrote in a recent MoneyWatch article. “The IRS makes this requirement so that you remind folks you pay to include such payments on their tax returns. Additionally you would need to furnish the IRS with a copy of the 1099-Misc.”
In what cases do you need to file a 1099-Misc?
Martin broke down the current rules for when to file the form:
- File for payments to any one contractor of $600 or more during the tax year in the course of your trade or business. The contractor must be an individual or partnership.
- File any for professional fees to an attorney, doctor or other professional made in the course of your trade or business.
- File for payments to corporations only if they’re for medical, health care, legal or fishing activities.
- File for payments of $600 or more in rent for office space, machines, equipment or land in the course of your trade or business if the payment was made to an individual or partnership, not to a corporation.
Martin reminded small business owners that the deadline for mailing 1099-Misc forms to any contractors you worked with in 2012 is Jan. 31, 2013. To read the complete MoneyWatch article, click here.