Q: What is a 1099-MISC form?A: The 1099-MISC form is required by the Internal Revenue Service for reporting annual payments to an independent contractor (non-employee), consultants, investors, etc.
Q: What is a 1096 form?A: Form 1096 is the Annual Summary and Transmittal of U.S. Information Returns. On this form, you will transmit the vendor 1099 forms to the IRS.
Q: Do you handle other types of 1099s besides 1099-MISC?A: No. Freedom 1099 is made specifically for processing and reporting payments made to independent contractors, consultants, investors, etc.
Q: How do I know if a person is a contractor or an employee?A: The IRS provides common law rules in determining whether a person is an employee or contractor. Please visit the IRS website.
Q: What is an independent contractor?A: An independent contractor is a self-employed individual who performs services for various companies and/or people. An independent contractor provides their own equipment and supplies and performs services on their own schedule. For more information on defining an independent contractor, visit the Internal Revenue Service website.
Q: What should I do with the 1099 and 1096 forms after they are generated?A: Distribute any 1099 forms directly to the contractors or other vendors. Send the 1096 form along with Copy A of all 1099s to the Internal Revenue Service.
Q: What will a contractor do with the 1099 form that I give them?The contractor will include the 1099 with their annual tax returns.
Q: When do I have to give a contractor a 1099?A: Please visit the IRS website for details on filing requirements.
Q: What paperwork do I need to give to a contractor before they can get paid?A: Before the contractor begins work, you should provide the contractor with an IRS W-9 form to complete and return to you. This form requests the contractor's Social Security or federal employer identification number, address, and tax classification. For a copy of the form, visit the IRS website.