How Do You Make a 1099 for Contract Workers?


Quick Answer

Prepare a form 1099-MISC, Miscellaneous Income, for nonemployees and independent contractors by computing the total amount paid for the tax year and listing it in Box 7, according to the Internal Revenue Service. Deliver a copy to the contractor, and mail another copy to the IRS.

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Full Answer

Form 1099-MISC is available online via the IRS official website, notes the IRS. Notably, every nonemployee must fill out a Form W-9 listing his correct taxpayer identification number, Social Security number or employer identification number in order for the payer to properly fill out the 1099-MISC.

Nonemployee compensation includes payments made to someone who is not an employee; this can be an individual, an estate, a partnership or a corporation, notes the IRS. For example, report payments made for professional services provided by contractors, engineers, architects, accountants and attorneys.

Every nonemployee compensated during the tax year for services performed, commissions, fees, awards or prizes to the amount of $600 or more must be issued a 1099-MISC, notes the IRS. The deadline for delivering a copy of the 1099-MISC to the nonemployee is January 31 of the following calendar year; make sure the IRS gets a copy by February 28. If filing form 1099-MISC electronically using the IRS’ FIRE system, the deadline is March 31.

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