Why Filing Form 1099 is important in the USA
Filing Form 1099
It is very important for any of the individuals staying in the USA to file their taxes very properly. Form 1099 is one of the important forms that one must submit for any of the income they earn in that tax year. The person may earn through the rent, royalties, self-employment, miscellaneous income, freelancer, insurance, or any such independent income. It is usually the report of the non-employees who are earning through the different sources. Many of the people living in the USA are aware of this Form 1099. However, they still need to explore more about this form. They give many of the individuals who fail to issue these forms a high penalty through the IRS. To avoid the last-minute hassle of issuing Form 1099, ensure that you get ready for it at the earliest.
Who will need the Form 1099?
IRS gives different forms to different individuals like sole-proprietors, independent contractors, freelancers, etc. The client or the businesses that pay for the specific services must issue Form 1099-MISC. If the non-employee is paid more than $600 per tax year, then the client needs to generate Form 1099-MISC compulsorily as per the IRS rules. In case, the amount is less than $600, one does not have to do this and there is no need to file this form. In case of paying to the non-employee, the client must issue Form 1099 by 31st January. They must file the copy by the last date of March or as per the stated guidelines. As personal payments are done for any general reasons and not considered as the payment for the work done, so make sure that this Form does not consider personal payments.
The need for W-9 Form:
Form W-9 has all the information of the name, non-employee, and identification of the taxpayer like the Social Security Number of the non-employee who will be paid. It must have the citizenship of the USA and Foreign Account Tax Compliance Act (FATCA) code. As per the client who is paying for the non-employee individual must generate the IRS, Form 1099-MISC.
Meru Accounting is an accounting firm that helps file Form 1099 for USA individuals. They provide one of the finest accounting related services for the client all over the world. Do you have Backlog of Bookkeeping to be done ? Don’t Worry! We are here to help.
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