1099 – Is it the year Crusaders struck or something else? It is January and in the United States this could mean only one thing – a form that IRS requires all businesses send to its independent contractors whose services were engaged last calendar year. Typically, these would be people who are paid on a per job basis like artists, web designers, legal consultant, videographers and others. 1099 comes with a dizzying array of variants and 1099-MISC being the most common. This post is all about 1099-MISC.
Is this meant for me?
Did you pay anyone more than $600 towards rent or other services provided? If the answer is yes, then you need to issue a 1099 for them. There are other reasons you might be required to send a 1099. Head over to IRS website and read the instructions carefully.
What is the Deadline for Filing?
As early as January 31st, 2013 you need to send your vendors a copy of the 1099-MISC. You should send a copy to IRS by February 28th, 2013 if you send it by snail mail or by March 31st 2013 if you file electronically. The IRS uses 1099s to match income reported and needless to say there are penalties if the deadlines are not complied with. Don’t be a Johnny come lately here! Remember your vendors/contractors will need this information to file their income taxes on time!
Okay, tell me how do I track these 1099-MISC vendors in Zoho Books?
Before you start tracking 1099-MISC vendors in Zoho Books, you need to request your vendors to complete a W-9 form. Once your vendor’s information is received, then enter it in your accounting software. Here is short guide on how to track 1099-MISC vendors in Zoho Books.
Now! Tracking is fine, but how do I send them to the contractors and file with IRS?
To get your information from Zoho Books and file it, you need to export your vendor from Zoho books into an excel or CSV and import that into the 1099 filing service of your choice.Click on 1099 guide for detailed instructions. You can use the services of any online 1099 filing and delivering vendors that have been approved by the IRS. Here is the link from the IRS website that lists the various providers approved by the IRS for delivering and filing 1099. (See below). You should ideally choose a provider that can file your returns online AND deliver it online to your vendors/contractors thereby removing paper from the process.
http://www.irs.gov/uac/Information-Returns-(Forms-1042-S,-1098,-1099,-5498,-8027-and-W2G)
As I had mentioned earlier, 1099 Forms are used for matching reported income and IRS is very serious about it and you should be as well.
This sounds excellent since I hire 35 of them throughout the year. But where is the short guide you speak of? How do I track 1099 vendors in Zoho books? Is there a check box in the vendor info page to track 1099 income like quickbooks online? I would really like this feature. Thanks!