It is the responsibility of the business/employer to know which 1099 forms apply to their particular business. Fortunately, there is a shorthand way to determine whether your business needs to file 1099s. If you paid more than $600 to subcontractors, vendors, or other payees who are not employees of your business, then chances are some kind of 1099 rules are going to require to report these payments both to the IRS and the payee.
In some cases, even smaller amounts may trigger a 1099 form filing. Taxable interest payments, for example, must be reported for any amount greater than $10. Moreover, many different types of financial payments and distributions get swallowed up under these 1099 rules. Real estate deals, insurance contract payouts, debt cancellation, stocks and bonds, and health and education savings accounts. There are even specific provisions for fishing boat proceeds in the catchall form 1099-MISC.
1099 Form Instructions
Even if your business and industry experience are new, it generally won’t take you long to figure out which set of 1099 rules is most likely to apply to your company. But knowing exactly what these rules mean for your business and whether you meet any number of exemptions and exclusions, it’s often helpful to read the actual form instructions as provided by the IRS. We provide easy links to IRS form instructions so that our current and prospective clients know exactly how to build and use a customized software suite from Advanced Micro Solutions (AMS).
1099 Rules to Know for Filing Forms
1. Know Who and Where to Send the Forms. Before you start making payments to a subcontractor or other vendor, you should document who you are paying and where they reside. There’s actually a form that does just that. Have your vendor fill out a w-9 before any services or payments are delivered.
2. Get the Forms Ahead of Time. Don’t put yourself behind from the beginning by procrastinating on getting the blank 1099 forms you need. You can send away to the IRS, swing by your office supply store, or if you’re planning on e-filing directly with the IRS, you can even generate your own blank tax forms for your vendor and archived records.
3. Have a Method for Preparing the Forms. For even a handful of 1099 filing forms, you’re likely going to want to avoid handwritten form preparation. Our basic Forms Filer platform can prepare and print information on pre-printed forms for just. Without some kind of method, there will be madness. Count on it.
4. Have a Method for Submitting the Forms. AMS offers multiple options. You can stick to the Forms Filer platform and mail out the forms for both the payees and the IRS yourself. With our E-File Direct, you can file an unlimited number of forms electronically with the IRS. You can also use our third-party software service to take care of the paper mailings and e-file forms for your business.
5. Have a Method for Documenting the Forms. All AMS software solutions have the kind of file security, data storage, and email communications to thoroughly document your filing forms. Don’t take this step for granted. It could be essential if you get audited, but it can also be important to review past year filings when preparing next year’s forms.
Get AMS Form Filing Software
Discover what’s made AMS so successful for more than three decades. Download our demo software, buy our products online, or talk to our Sales and Information team at (800) 536-1099 at any time.