[United States] Paying contractors: Everything you need to know about Form 1099-MISC

This article covers US tax requirements and applies to Wave Payroll in the US.

Filing deadlines for the 2019 tax year:

The deadline to e-file your 1099s with Wave is January 25, 2020.

If you prefer to file your 1099s with the IRS manually, the deadline to file and provide 1099s to your contractors is January 31, 2020.

Form 1099-MISC is an IRS form that summarizes all compensation your business has paid to a non-employee worker or contractor. Independent contractors use these forms to file their taxes.

What do I need to do?

You must send Form 1099-MISC to any contractors you have paid more than $600 to in a calendar year. This is not limited to individual contractors: the requirement extends to partnerships and LLCs. Corporations are excluded.

How do I get Forms 1099-MISC from Wave?

If you use Wave Payroll, Wave will generate a 1099-MISC form for every contractor you’ve marked as a 1099 Contractor and paid more than $600 in a calendar year. This applies to all contractors you’ve paid more than $600 to using direct deposit, cash, check, or bank transfer.

Please note when paying contractors via Direct Deposit: In order to have your 1099 contractor bills appear on Form 1099-MISC, you must have Account Mapping set up. Click Settings at the bottom of the left-hand navigation menu. In the menu that appears, scroll down to Account Mapping (found under Payroll). In the Funding Account dropdown, select the bank account you use to pay contractors with direct deposit, and click Save.

Wave can e-file 1099s with the IRS on your behalf. To begin the process of e-filing, go to Tax Forms under the Payroll menu on the left hand side. 

  1. Click Generate next to the 1099 you would like to file
  2. Click E-file your tax form now

Wave will then file the Form 1099-MISC on your behalf. 

You will still need to provide the form to your contractors. Once the form has been generated, download Copy B to provide to your contractor, and Copy C for your records.

Repeat these steps for any remaining contractors.

If you prefer, you can also file manually with the IRS.

What’s the deadline?

The deadline to send 1099 forms to your contractors is January 31. This is the same date as the deadline for W2 forms for your regular employees.

The penalty for missing this deadline varies, but can range from $30 to $100 per form, to a maximum of $500,000 per year. If you neglect to send any 1099 forms, fees can go as high as $250 per form.

If Wave is filing on your behalf, the deadline is January 25th. If you choose to e-file with Wave after this date, Wave can’t guarantee that you will meet the filing deadline.

The penalty for missing this deadline varies, but can range from $30 to $100 per form, to a maximum of $500,000 per year. If you neglect to send any 1099 forms, fees can go as high as $250 per form.

Was this article helpful?
17 out of 26 found this helpful