If you paid a non-corporate entity more than $599.99 for services provided to your arts and crafts business during the year, you'll need to issue them a Form 1099-MISC. The Form 1099-MISC has to be issued to the recipient by the last day in January and mailed to the Internal Revenue Service with the Form 1096 (transmittal form) by the last day of February.
It's very easy to prepare a 1099-MISC - Follow along as I walk you through the steps:
There are numerous ways to work your way through the 1099-MISC process. The instructions in this step-by-step guide are tailored to the arts and crafts business that is preparing the forms themselves, manually, using the paper forms.
The paper forms are printed with two 1099-MISC to the page. Since I've been filling them out (about 15 years at least), they've looked the same - five-part white paper with pink printing. You can buy these from any office supply store, get them for free from your local Internal Revenue Service (IRS) taxpayer services office or order them online from the IRS website.
- Copy A goes to the Internal Revenue Service
- Copy 1 goes to the state (if your recipient lives in a income taxing state)
- Copy B and Copy 2 goes to the entity who did work for your arts and crafts business
- You keep Copy C for your records.
If you have only a few 1099-MISCs to issue, it's not that big of a deal to do them manually. If you have more than a few, you really should think about outsourcing the work since you'll drive yourself crazy trying to keep from making mistakes on the forms.
Also, you could buy software to print the forms in submittable format. I did a Google search using the key phrase '1099m software' and found a bunch of different software providers for under $50. Believe me. more than two or three 1099-MISC and you'll be glad you bought the software. If you're handy with Word, you could also set up a doc to print in the fields, separating the IRS form and sending the five parts through the printer one at a time.