How Do You Prepare A 1099 For A Contract Worker?
When you pay at least $600 in compensation for work or services done by a person who is not an employee of your trade or business, you probably need to prepare a 1099-MISC. Step 1 Determine you paid $600 or more to a contract worker during the tax year. Include only payments made in the course of your trade or business; personal payments are not included. Include payments made directly to the worker for parts and materials. Step 2 Obtain form 1099-MISC. It is titled “Miscellaneous Income.” Step 3 Write your business Employer Identification Number (EIN) or your Social Security number as the payer’s federal identification number. Step 4 Write the worker’s Social Security number as the recipient’s identification number. Step 5 Write the amount of money you paid to the independent contract worker in box 7, titled “Non-employee compensation.” Step 6 Write any federal or state income tax withholding you have done for the worker in box 4 or 11. It is unlikely you have withheld income tax for
