1099-MISC Form for Independent Contractors
If you are a contractor, IRS is very meticulous at making everyone to file Income Tax. This is the reason that many people have started to file 1099-Misc Forms throughout the country. Your Customer presents you a 1099-MISC Form to the agency, and IRS then evaluates it to form put forward by you. It may bring about some real severe outcomes for you if you even by mistake overlook 1099-MISC form.
1099-MISC Form – Criteria:
Any working contractor who has been paid an amount of $600 for the year or more needs to fill out a 1099-MISC form from their customer. If you consider that there is no mail communication to catch hold of you and plan to skip doing taxes, then beware and do not make any such mistake. It is very important that you be in touch with your customer and do check that the form is being sent to him to your correct address. There may be cases where a customer does not feel the importance of form and may neglect to fill the same, but it is your prime duty to make filled up form available in time.
Many people make a mistake by assuming that they need not report any income as they did not cross the boundary limit of $600. One must note that an individual needs to report the income irrespective of the fact that it is above or below the cut-off limit. A 1099-MISC form is an opening stride to assemble your tax return.
Selection measure for Independent contractor:
The process of verifying whether a person is the independent contractor or not can be composite and is dependent upon the essentials data and situation of each case. The determination is dependent on whether the individual for whom the services are executed has the right to direct how the worker carry outs the services. It is not dependent simply on how the worker is paid, how frequently the worker is paid, or whether the charges paid is part-time or full-time.
There are three essential grouping of aspects that are significant in determining a worker’s categorization:
Independent contractor who makes utilize of a 1099-MISC form to file their taxes, as a rule, have to fill out a Schedule C, which computes the gross yearly earned income and any expenditures that can be deducted. Apart from Schedule C, contractors will be required to file a Schedule SE, which will reckon the sum quantity paid for Medicare and Social Security deductions.
Filing a 1099-MISC is not at all a complicated course of action. A tax training plan can lend a hand in filing your taxes comparatively in a trouble-free way. It is essential to put a spotlight on taking full advantage of your benefits, as independent contractors frequently have fairly a small number available to them.