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Independent Contractor Forms And Taxes:
Form W-9
If you've made the determination that the person you're paying
is an independent contractor, the first step is to have the
contractor complete Form
W-9 (PDF), Request for Taxpayer Identification Number and
Certification. This form can be used to request
the correct name and Taxpayer Identification Number, or TIN,
of the worker. A TIN may be either a Social Security Number
(SSN), or an Employer Identification Number (EIN). The W-9
(PDF) should be kept in your files for four years
for future reference in case of any questions from the worker
or the IRS.
Form 1099-MISC
Form 1099-MISC
(PDF) is most commonly used by payers to report
payments made in the course of a trade or business to others
for services.
If you paid someone who is not your employee, such as a subcontractor,
attorney or accountant $600 or more for services provided
during the year, a Form
1099-MISC (PDF) needs to be completed, and a copy
of 1099-MISC
(PDF) must be provided to the independent contractor
by January 31 of the year following payment. You must also
send a copy of this form to the IRS by February 28 (although
the form does not have to be sent to the IRS until March 31
if the business files the 1099s electronically, using the
FIRE system).
Also note that independent contractors may have their own
employees or may hire other independent contractors (subcontractors).
In either case, they should be aware of their tax responsibilities,
including filing and reporting requirements, for these workers.
There are certain situations where a 1099 is not required.
These exceptions are listed in the 1099
Instructions (PDF).
Filing Electronically
The Filing
Information Returns Electronically (FIRE) system
is set up for financial institutions and others to file Information
Return Forms 1042-S, 1098, 1099, 5498, 8027 or W-2G. Information
Returns can be filed electronically, however, you must have
software that can produce the file in the proper format as
required by Publication 1220. FIRE does not provide an electronic
fill-in form option. For additional information on FIRE software,
please visit the FIRE software vendors Web page.
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