Things You Need to Know About 1099 Tax Form Before Filing Taxes
Even if you are a business owner or a profit-making business, you must pay the taxes levied on your income. Filing taxes involve adhering to specific guidelines and filling up a lot of forms, from stating the revenue generated to knowing the total income on which tax is levied. The 1099 tax form is part and parcel of the forms you are required to fill.
A 1099 tax form falls under the IRS tax form category that states any amount received from fees, royalties, charges, rent and legal services.The 1099 tax form is a very crucial form for the IRS as it allows them to match data that taxpayers filled against their tax returns. In this regard, this article will explain more things that you need to know about the 1099 tax form before you file your taxes.
It is important to submit the 1099 tax form than to receive it from the IRS. Generally, enterprises except the commercial ones must give these forms to their employees who get a $600 wage a year. If you received less than $600 during a tax year from your employer; you must also report the income earned. Your service provider does not have to provide you with the 1099-MISc, but this does not mean you have been exempted from paying your levies on the total amount of money you earned that year.
Secondly, you need to fill the 1099 tax form before January 31. Conversely, if the IRS fails to send the form, you must pay taxes as usual.If you do not issue the 1099 tax form on time, you will end up paying a fine.
Apart from that, make sure you report any error you make while filing the 1099 tax forms immediately. Correcting the 1099 tax form by the investor is important because the IRS will receive the correct information.Conversely, if the erroneous form is submitted to the IRS, the contractor needs to contact the service provider so that they correct and dispatch the real data.For instance, if the amount of income you filled on the 1099-MISC is erroneous, you should contact the person who issued the form and request them to send the correct 1099-MISC to you and the IRS. Once you get the correct 1099-MISC form, make sure you record your tax return form. Make sure the IRS does not find errors on your form because should there be mistakes, they will need you to write and submit a report with reasons why your form has mistakes.
In conclusion, you must examine your national taxes. Both the IRS and the state need your income tax details. So, if you miss filling the 1099 tax form, your state will end up billing you too.
Once you follow this article, you can rest assured that you will evade paying fines that may arise as a result of submitting your 1099 tax form late.