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

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

The deadline for filing Form 1099-MISC for the 2018 tax year has passed. Check back in January 2020 for information about filing for 2019.

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 1099 forms from Wave?

If you use Payroll by Wave, Wave will generate a 1099-MISC form for every contractor you’ve marked as a 1099 Contractorand 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.

Wave can e-file 1099s with the IRS on your behalf. To begin the process of e-filing, go to Payroll > Tax forms and click Generate next to the 1099 you would like to file. 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.

Once you have downloaded all of the above forms, click E-file your tax form now and Wave will file the 1099 for you. 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 28th. 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.

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