Form 1099 Instructions

By Kaye Morris

The Internal Revenue Service's Form 1099 reports certain types of annual taxable payments made to individuals, partnerships and businesses. The most common form of income reported on a 1099 is miscellaneous income. Miscellaneous income includes items such as payments to independent contractors and Internet sales.

Reporting Periods and Income Limits

The 1099 reflects payments you, the issuer of the payment, made to the recipient for the previous calendar year. A calendar year begins Jan. 1 and ends Dec. 31. A 1099 does not have to be filed for total annual payments below the filing limit of $600.

Required Information

Sample IRS-Approved Form

The first sections of the 1099 contain your individual or business information as the issuer of the 1099. This information includes: your name or that of your business, address, telephone number and the your federal identification number. The federal identification number is the tax identification number of your business or your Social Security number.

The next sections of the 1099 contain information about the individual or business that you paid. This information includes: the name of the individual or business, address and the recipient's federal identification number.

For the final step, enter the amount of annual payments made in the appropriate box on the form. The recipient reports this amount as income on his income tax return. Record payments to independent contractors in Box 7: Non-employee compensation. Enter any necessary state filing information in the bottom-right of the form.

Software, Forms and Recordkeeping

The IRS mandates an approved format for the 1099 with copy designations for each recipient. You must submit the exact form approved by the IRS. Purchase the forms at an office supply store or business forms printing service.

Accounts payable software often contains a module that will generate 1099 information in approved format. Review the forms to ensure that all of the required information is printed. Print a copy of the forms solely for review before printing on the IRS-approved forms.

When you have completed all required 1099 forms, submit Copy A to the IRS along with Form 1096. Form 1096 provides consolidated totals for all of the 1099 forms. Send Copy B to the recipient. If the recipient lives in a state that requires 1099 reporting, submit Copy 1 to the recipient's state of residence. Maintain Copy C for your records.

Due Dates

Check the IRS website each year for the filing due dates. 1099 forms are due to the recipients before they are due to the IRS. The IRS places limits on how many forms may be filed by paper copy. For 2009, that limit is 250. If you are filing more than 250 forms, you must file electronically.

About the Author

Kaye Morris has over four years of technical writing experience as a curriculum design specialist and is a published fiction author. She has over 20 years of real estate development experience and received her Bachelor of Science in accounting from McNeese State University along with minors in programming and English.

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