Payments To Contractors - 1099-MISC
Per Publication 15-A, as a payor to your workers, you should distinguish clearly the difference between your employees and independent contractors to report correctly your payments. In case you pay independent contractors, you may file Form 1099-MISC, Miscellaneous Income, to report payments for services performed for your trade or business. You must generally report a payment as non-employee compensation if the following 4 conditions are met:
1. You made the payment to someone who is not your employee;
2. You made the payment for services in the course of your trade or business;
3. You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
4. You made payments to the payee of at least $600 during the year.
If your business follows a calendar year, to avoid potential penalties, deadlines of your 1099-MISC filing should be due to recipients by February 1 and to the IRS by March 31 by E-file. Contact The CPA Corner, Inc. at 949-387-2800 if you need us to help you file correctly and promptly your 1099-MISC.