The miscellaneous income is titled as form-1099-MISC. This federal form 1009 is required to file every year as a year-end report. Employers will provide the independent contractors and other non-employees with this federal contractor form 1009 and so that they are required to file informing the IRS of their federal and state income tax information returns. The recent rulings of IRS are incorporated in the form 1009 in a way suitable for certain players are as follows-
• The taxpayer can now have a foreign address. A taxpayer has an EIN but not in the USA
• Box 11 is new, Foreign tax paid on payments reported on Form 1099-MISC. Report this amount in U.S. dollars.
• Box 12 is new. Foreign Country or U.S. Possession for which the foreign tax was paid and reported in box 11.
As IRS through their expert stated that “There were a ton of proposed changes to the 1099-MISC form for the last several years. But those changes were rescinded. A provision in the Affordable Care Act (Obamacare) wanted to change the 1099-MISC form which reports $600 in services to “goods and services”. That would have really expanded the use of this form. But the new foreign address and tax paid is growing the form as well.”
Who Must File Form 1099-MISC?
Businesses should provide form 1099-MISC for the current year when paid $600 or more in the past year to individuals, independent contractors, and other businesses. $10 or more paid towards royalties and for some direct and indirect sale of any consumer goods to an agent/wholesaler or retailers for resale to the worth of $5000 or more.
Where to Get 1099 Forms?
1) Payments for rental property expensesForm 1099-MISC must be provided to any “nonemployee” to whom you paid $600 or more during 2011. This includes:
2) Payments to a physician, physicians’ corporation, or another supplier of health and medical services. Issued mainly by medical assistance programs or health and accident insurance plans.
3) Payments for services performed for a trade or business by people not treated as its employees. Examples: fees to subcontractors or directors and important payments.
4) Fish purchases paid in cash for resale.
5) Crop insurance proceeds
6) Gross proceeds paid to attorneys. (Box 14) (Due to IRS February 15th).
Difference Between W-2 and Form 1099-MISC
Form 1099–MISC is given by businesses to non-employees like independent contractors and other small companies towards payments made no later than January 31st. W-2 is given to employees working for an organization by the employer.
Then the businesses have to submit by e-file 1099-MISC forms to IRS on or before February 28th in a calendar year. Along with Copy A of all the 1099-MISC forms businesses provided to non-employees, one must submit a Form 1096 transmittal form to the IRS which totals all information from all 1099 forms. One should not use the downloaded 1099-MISC copy A from the internet because Copy A of the 1099-MISC form is in a specific color of red ink and cannot be duplicated.
One can submit all forms of 1099-MISC along with transmittal form 1096 (Annual summary and transmittal of US information returns) to IRS. E-file your Form 1099 Online before 1099 deadline 2017!