Tips About 1099 Tax Forms Before You File Your Levies
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 one of the forms you need to submit.
A 1099 tax form is a type of IRS tax form that deals with incomes from diverse sources such as fees, royalties, commissions, rent or 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. Typically, businesses other than the corporate ones ought to issue this form to contractors who earn a wage of $600 a year. If you do not earn a $600 wage in a year, you should also state how much money you make. 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.
Besides that ensure that you state any mistake made when recording the 1099 tax form. It is important to do so as it allows the financier to make the necessary changes on the form before sending it to the IRS. But if the payer has sent the incorrect form to the IRS, just ask the payer to send the right form. Should the false revenue generated be stated on the 1099-MISC form, the supplier should call the service provider so that they can rectify the mistake and send you and the IRS the right figure.As soon as the service provider rectifies the form, ensure that you dispatch your income 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.
Most importantly, consider your state taxes. Just like the IRS, most states require your income tax information. Therefore, failure to submit the 1099 tax form only attracts fines.
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.