Information returns are also known as 1099 tax designations. They are collected by the IRS to track the revenues that are paid to individuals. We provide you with guidelines on how to fill them out.
Basically, this form is where you can track your revenues paid to another person for the requested tax year. Suppose you have a gardener and you pay him $100 for one year to render gardening services, you would have to issue $1,200 as 1099-MISC. IRS uses this strategy to prove that the lawn mower reported all his earning for the year.
Knowing the right form is essential upon filling up the 1099-MISC. There are various types of 1099 forms and when filling out, be sure to have the MISC version. There are printable versions of this form in the internet but none of them will be honored. The official version must be the one you will fill up because it is the only paper that is readable to IRS computers. Official copies are readily available in big libraries, major post offices and IRS offices near you. Ask an official copy in major post offices, IRS offices and in big libraries as well. You may also order online and have it directly delivered to you.
It is actually very simply to prepare the form. One tip is to print your own copy of the form so in case you make a mistake, you don’t have to throw the official copy. The next thing to do is add up all the payments you made to the requested person. One form is only for one person and f you are reporting for several people, get different forms for each of them.
Write your name on the top left box of the form. Including your contact detail such as name/business name, phone number, address and email is important. Get your tax identification number and write it down on the boxes. Repeat the same for the right box that asks for another tax identification number but this time, write the tax identification number of the one you are issuing the form for. Then, write the address of that person at the bottom of the two boxes together with his name.
Now write down the total amount. The boxes running vertically n the middle of the form may have to be filled up by some. The box that appears first is the “1 Rents” field. Rentals paid have to be reported here. For basic fees paid for services within the year, report on box 7. This field is label as “nonemployee compensation.” This is actually the mot common situation so if you are in doubt what classification is your report, you may place it in this field.
Once you’re done, you may send it and get another hard copy of it together with form 1069 or the cover sheet for your form.