Employees who operate independently should also report on their income. This applies to both entrepreneurs and those who are self-employed, such as freelancers and people who won the lottery.
1099 forms for independent contractors must be filed with the IRS for reporting and transparency of their operations for each profit. Don’t meet your deadline? Write a statement to the IRS for a 30 day grace period on the provision of the document.
Possible fines for late submission of reports
You must do this by January 31, in case of delay, a fine of up to $ 100 is threatened. If the next year to refuse to provide the document, the penalty will increase to 500 thousand dollars. The amount is huge, so do not delay filling out the form.
Are there any differences between writing a document?
It is most convenient to fill out a 1099 form independent contractor agreement together with a tax return, in order to avoid mistakes and a comparison of profits. An important difference for an entrepreneur will be the deduction of business expenses, these are
- Invoice bills
- Workers’ wages
- Shipping fees
If you had several projects, it is better to download it and write each one. Then in the general form 1040 sum up the received profit.
How to return to the tax office
Download and printable forms and return the completed document to the IRS. Remember to keep yourself a copy. Remember, tax service will not accept forms, corrected or with incorrect information. If you made a mistake when writing, print another 1099 for free and send it electronically to the official website. You can also mail.