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IRS Form 1099-MISC: How to Fill it Right

Margarete Cotty

2024-04-18 11:56:27 • Filed to: Other IRS Forms • Proven solutions

An 1099-MISC form declares the total amount of payments you get from an individual throughout the year that you offer services to.

Your Best Solution to Fill in IRS Form 1099-MISC

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IRS Form 1099-MISC is important for freelancers and it's especially critical to know how to fill it right. It also consists some of your personal details like name, address, and even employer identification number or Social Security number. Most essentially, it will categorize every type of payment in distinct boxes on the form. In general, if you get payment for contract work you are doing, then your yearly earnings will show up as nonemployee reimbursement.

Instructions to Fill out IRS Form 1099-MISC

Step 1: Download the IRS Form 1099-MISC. Import the form in PDFelement. Zoom in to the size that you feel comfortable to see the form.

Step 2: Fill in the box in the upper left corner that asks for your name, street address, state or province, city or town, ZIP code, country, and contact number.

Step 3: Under that box, write the tax identification number of your business. If you’re a sole proprietorship, it’s usually the Social Security number.

Step 4: To the right side of the previous box, you write the identification number of the recipient, which is the tax identification number or Social Security of the person you paid.

Step 5: Under the two boxes you just filled up, fill up the boxes that ask for the name of the recipient, street address, state or province, city or town, ZIP code, and country.

Step 6: Under that section is a box that asks for an account number. Here, you have to write an account number for your recipient if he owns multiple accounts with you and you’re filing over one 1099-MISC for this individual.

Step 7: To the right side of the account number box you will find another box that reads “2nd TIN not.” and contains a square that can you can checked or leave blank. You can mark it if the IRS has notified you two times in the last 3 years that the recipient gave you the wrong tax identification number.

Box 1: Rents - If the business paid the recipient $600 or more for a particular kind of rent, write the amount here.

Box 2: Royalties - If the business paid gross royalties of at least $10 to the recipient, enter the amount here.

Box 3: Other income - If you paid your recipient at least $600 for something that is not covered by any of the other boxes on the form, write it here.

Box 4: Federal income tax withheld - If the recipient was covered by backup withholding, enter the amount of the business withheld from the pay.

Box 5: Fishing boat proceeds -This box doesn’t apply to many people. Use only if the business paid somebody for catching fish.

Box 6: Medical and health care payments - If the business at least $600 to any medical expert, enter the amount here.

Box 7: Nonemployee compensation - Report here the payments of at least $600 to the independent workers.

Box 8: Substitute payments in lieu of dividends or interest - This is for collective payments of $10 or above received by an agent for a customer instead of tax-exempt interest or dividends because of a loan of a client's securities.

Box 9: Payer made direct sales of $5,000 or more of consumer products to a buyer for resale- Check the box only if it applies to you.

Box 10: Crop insurance proceeds - Enter the amount if your business is an insurance company and paid at least $600 to a farmer.

Boxes 11 and 12: The IRS used these two boxes for foreign taxes paid, but this is now reported on the Form 8966, so just skip these two boxes and leave it blank.

Box 13: Excess golden parachute payments - Only use this box if you compensated an ineligible individual at least 3 times the base amount contingent of the individual on a change in the possession or corporation control.

Box 14: Gross proceeds paid to an attorney - If the business paid at least $600 to a lawyer for legal services. Enter the amount here.

Box 15a: Section 409A deferrals - This is an option. You can add more details in Internal Revenue Bulletin 2008-52.

Box 15b: Section 409A income - If the business delayed a payment that usually would have been classified as section 409A revenue, but was not because a nonqualified delayed compensation plan fails to satisfied the requirements of section 409A. State the amount here.

Boxes 16 - State tax withheld, 17 - State/Payer's state no. and 18 - State income - If the business contributes in the combined federal/state filing program or is asked to file paper copies of form 1099-MISC through a state tax department. Fill in these boxes.

More Tips and Warnings for IRS Form 1099-MISC

IRS' Most Common Complaints

People should use the red forms. You need to use the real form; you are not allowed to print it off from the computer, although you have a color printer. The forms are scanned so it needs to be the proper paper.
Do not cut the copies. Always leave all the pages whole.
Do not staple the forms. Do not fold or damage them by any means. They need to get through a scanner so it’s important.

Minor Complaints

Don't use a dollar signs ($) every time you are typing the amounts. It is already written on the form anyway.
Use cents and decimal points.
Don't put zeros in spaces, just always leave them blank.
Don't use number signs (# ).