Party Like It’s 1099

Party Like It’s 1099

You can’t escape the IRS. No matter what your job, even if you’re an independent contractor, the IRS wants you to pay your taxes, and they will find a way to make sure they get their money. Thanks to the Form 1099-MISC, independent contractors can file their taxes and avoid scrutiny from the IRS. The IRS receives the form from your client, and matches it with the information you send.

Independent contractors who receive more than $600 of compensation throughout the tax year from a single client will need to file a 1099-MISC. If you fail to receive the form by mail, you should contact the client and have them resend a form. It is your responsibility to make sure you file your 1099-MISC, as the IRS will find out. Some clients may not know they have to send the form, so you should always take a proactive approach when it comes to your 1099-MISC.

You are required to report the income regardless of whether the client sends the form or not. While there is a $600 threshold for filing a 1099-MISC, that doesn’t mean you don’t have to report income made under that amount.

Typically, taxpayers who file their taxes with a 1099-MISC form can calculate their earned income and qualifying deductions using a Schedule C. Those taxpayers who are self-employed or independent contractors also have to file a Schedule SE, to account for Medicare and Social Security which may need to be paid by the taxpayer.

There’s no reason to make filing your taxes with a 1099-MISc difficult. In fact, when you use tax preparation software, the process is virtually done for you. Those who file with a 1099-MISC can maximize their benefits by using deductions and exemptions, and independent contractors often qualify for a wide variety of money saving options.