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if you own or manage a business that recently hired an independent contractor you need to know how to generate a form 1099 miscellaneous additionally if you are the independent party keep in mind you'll need this form once tax season rolls around let's review the basics of this process who qualifies for this filing system and how to file it what is a 1099 miscellaneous you submit a form 1099 miscellaneous to the IRS to report business payments made to a contractor to the IRS it helps the government track how much money independent businesses make some companies use them as a way to track their spending the form 1099 miscellaneous is also used by a contractor to calculate the amount of income taxes only since he or she doesn't quite operate an automatic withholding system the pay stub is the most accurate method of tracking money earned over an years time it consolidates all projects and commissions into one place for the IRS to track who is considered a contractor a 1099 form applies to any contractor who provides a business service not a personal service this includes freelance creative jobs like writing photography or web design private consultants or one-off contracts like an accountant filing your taxes may apply as well it can also include roofing or lawn services so long as they are used for the purpose of a company not an individual for example if a lawn service mows your lawn it is considered a personal service and does not require a form 1099 however if they landscape your business and you pay more than $600 it is considered a business transaction and requires filing a good rule of thumb is to prepare this form for any sole proprietor or an LLP small businesses like an S corporation C corporation or LLC don't require a 1099 miscellaneous there is a gray area when it comes to some attorneys and medical providers even if your attorney is considered a corporation they need this form same goes for medical services that are for-profit how to file a form 1099 miscellaneous once the service is completed and paid for the customer fills out a form 1099 miscellaneous this is a multi sheet form one copy goes to you another to the contractor and a third to the IRS you will need to know the contractors legal name and business name federal tax classification exemption codes and address and if you paid on credit or using a third party like PayPal then you'll need to file a 1099 K most forms are self-explanatory but to be sure you are filing correctly use the IRS box by box instructions file your form with confidence maybe you just launched your business and you have a long list of freelancers you paid this year or maybe you're managing a big company with a long list of contractors whatever the reason our form 1099 generator is the perfect deal for you check it out today at the paystubs comm if you enjoyed this video be sure to LIKE comment and subscribe