In order to fill out and file the 1099, there are several key pieces of information you need to gather. The two main buckets are:
Before you begin working with and paying a contractor or vendor you should have them fill out a W-9 form. This magical form holds the key to all the information about the recipient you’ll need when filling out their 1099. In the case that there are any errors on the 1099 form you ultimately file for that recipient, the IRS will want to know if you’ve collected a W-9. If you haven’t, then you could face fines and penalties.
There is no need to send the W-9 to the IRS, it’s purely for your records. Here’s what you’ll collect from a W-9 form that in turn will plug into a 1099:
If you plan on filling out 1099-MISC forms by hand then you can’t simply print the forms out and write the information on them. You’ll need to order approved forms from the IRS or buy them at an office supply store. For a box-by-box guide to filling out the 1099-MISC by hand, this is a great guide.
For electronic filing (which the IRS recommends and is required if you’re filing over 250 1099s), you’ll need to adhere to IRS’ Publication 1220 instructions for formatting files correctly. With electronic filing you can’t plug information into boxes the same way you would if manually filling out a 1099. The IRS’ FIRE system requires a special file format for electronic filing.
Payable handles the translating of recipient tax identification information and payments information into the correct electronic file format for the IRS.
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