2016 1099 Form Template

[toc] The purpose of this form is for employers and employees to submit information on income derived from part-time, temporary or freelance work. It is a multi-part form, consisting of seven pages that need to be filled out to report various sources of income. It is the responsibility of the employing company to send this information to the employee or contractor, to retain records and to submit to tax agencies.

The form is used by the IRS to keep track of certain types of income, for the purpose of collecting the correct amount of taxes. Since a 1099 contractor employee does not have income taxes taken out of his or her check, this form is used in place of the W-2 form. For income of less than $600 per year, a 1099 form is not required, though the income-earner must still report income that falls below this threshold. For 1099 contractors, the form is received in the mail from the employer and is then used as part of the payee’s regular tax statement or 1040 form.    Companies that pay 1099 contractors must report all income they pay to employees who do not have income taxes withheld from their paychecks. The form is used to report this income each calendar year. Companies that employ freelancers, temporary workers and part-time workers without withholding income taxes and Social Security taxes must report these payments to the IRS. This helps make sure that the IRS is able to collect taxes on all eligible income. The employing company must send a completed form to the IRS, state tax agencies and the recipient of pay. The 1099 takes the place of the more common W-2 as a record of income.

This IRS form is used by both the employer of 1099 contractors and by the 1099 contractors themselves. The employer, or payer, must fill out the form and send it to every employee, or payee, who falls into this category of worker. The payee must then claim the income on the 1099 form on his or her regular tax statement or 1040 form for that calendar year. Companies that hire and pay freelancers, consultants and other flexible workers may be required to fill out numerous 1099 forms every year. The 1099 takes the place of the more common W-2 as a record of income. Any company that pays employees without regularly withholding income tax is required to use the 1099 in place of the W-2.  Also, individuals who work for themselves as freelancers may be required to fill out a 1099 form. Finally, any employee who works for a company that does not withhold taxes should receive a 1099 from the company and claim this amount as income with a 1040 annual tax statement.

In the case of the employer, the 1099 form must be filled out and submitted to the appropriate parties (the IRS, state tax agencies and the employee) each tax year. The employer must follow a long list of requirements on how and when to submit these forms. Each year, the forms are required to be shipped to each employee no later than January 31st for the preceding tax year. The employer must also submit the forms to the various tax agencies no later than the end of February (or the end of March for online submissions). It is the responsibility of employees to claim income on any 1099 forms they receive from employers. As with all income, 1099 contractors must meet all applicable deadlines for each tax agency.  Workers must account for all income they earn each calendar year and pay all applicable taxes.

They may still be able to claim expenses for their work, reducing the amount of taxes they must pay.

The IRS and state tax agencies impose a variety of penalties on companies and employees who do not file a timely 1099 form.  For the employer, penalties begin at $100 per 1099 form and can escalate up to over $1.5 million depending on circumstances. The longer the company is in noncompliance for filing forms, the greater the fees it may have to pay. There may be different penalties assessed depending on the size of the company. For employees, penalties may include extra fees and interest charges. In extreme cases of noncompliance, failure to pay fees and penalties may result in garnishment of wages and incarceration. Filling out a 2016 1099 form electronically

For employers, a 1099 form is a simple procedure of filling out the boxes in the form. Here are some of the necessary steps:

All taxpayers can use the 1040 if they so choose, though many are required to use this form. The 1040a is a somewhat simpler form and may be used by taxpayers who have less than $100,000 in income and who do not itemize deductions.

Taxpayers who make less than $100,000 a year, use the standard deduction and do not have income from their own business or farm may be able to use the 1040a form.  The 1040EZ is the simplest IRS form and may be used by people who don’t claim dependents and who meet the requirements for the 1040a.

The tax brackets for each calendar year are printed out in the IRS 1040 instruction booklets, available online and at IRS offices and by tax professionals. They show the amount each taxpayer must pay in federal income taxes based on adjusted gross income.