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Things You Need to Know About 1099 Tax Form Before Filing Taxes

Irrespective of whether you are a sole proprietor or a corporate entity, any income you earn attracts the provisions of taxation. Filing taxes involve adhering to specific guidelines and filling up a lot of forms, from stating the revenue generated to knowing the total income on which tax is levied. The 1099 tax form is part and parcel of the forms you are required to fill.

A 1099 tax form is one of the IRS tax forms you need to fill that requires you to state any revenue received from sources like subscriptions, royalties, commissions, rent or legal services. The 1099 tax form is a very important for the IRS since it permits them to compare information that taxpayers submitted against their tax returns. In this regard, this article will explain more things that you need to know about the 1099 tax form before you file your taxes.

It is of paramount importance to dispatch the 1099 tax form instead of waiting for the IRS to give it to you. Typically, businesses other than the corporate ones ought to issue this form to contractors who earn a wage of $600 a year. If you received less than $600 during a tax year from your employer; you must also report the income earned. Even if you do not receive the 1099-MISC form from your supplier, your income is taxable.

Secondly, you need to fill the 1099 tax form before January 31. However, if you do not get your form by the end of February or March, it does not mean that you should not pay the levies. If you do not issue the 1099 tax form on time, you will end up paying a fine.

Apart from that, make sure you report any error you make while filing the 1099 tax forms immediately. This should allow the payer to correct the mistake before they send it to the IRS. But if the payer has sent the incorrect form to the IRS, just ask the payer to send the right form. For instance, if the amount of income you filled on the 1099-MISC is erroneous, you should contact the person who issued the form and request them to send the correct 1099-MISC to you and the IRS. Once you get the correct 1099-MISC form, make sure you record your tax return form. If the IRS discovers that you have made mistakes on the form, they will call you and require a statement explaining the same.

What’s more, you need to check your country’s taxes. Both the IRS and the state need your income tax details. Therefore, failure to submit the 1099 tax form only attracts fines.

Once you follow this article, you can rest assured that you will evade paying fines that may arise as a result of submitting your 1099 tax form late.

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