Form 1099 MISC is the income earned will be entered, but there will not be any tax deductions for federal and state income taxes, nor will any compensation, social security, or medical deductions be taken. Since the 1099 recipient is not an employee of the business, the business is obligated only to tender the income to the contractor sans any deductions. This1099 income is also reported to the Internal Revenue Service so it has the opportunity to track income from freelance workers. The freelancer will be obligated to make his or her own tax deductions and forward such payments to the IRS.
Income and taxation, corporations, small businesses, and other employers use a variety of forms to record the income earned by an employee or an independent contractor. Typically, employees of a business receive a W-2 form that lists the income they received during the year. This form also contains deductions taken from that income in the form of federal and state taxes, deferred compensation and social security contributions, to name a few. 1099 forms are used for a number of reasons, though, typically, they are given to independent contractors record of the income they received from a particular business.
Those who receive 1099 come from a wide spectrum. More and more businesses are bringing in independent contractors to work on a similar "per job" basis, as this helps keep the employer costs down since the employer does not have to pay for such things as health and life insurance, as well as make contributions to retirement plans. After the job is completed, the employer can cut the cord and simply issue the independent contractor a 1099 Form.
Though the 1099 MISC Form is the most popular, 1099 forms are also issued to denote the interest (1099 INT) the government may have paid in a particular tax year, and 1099 G Form denotes any tax refund you may have received from the government.
Only three steps Efile form 1099 on 1099online.com
Free registration or login with face book account
Entering the 1099 Data
Efile the form to IRS
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