You can’t run away from the IRS. No matter what your job, the IRS wants you to pay your taxes, even if you are an independent contractor, and they will find a way to make sure they get their money. With the form 1099-MISC, independent contractors are able to file their taxes and avoid IRS scrutiny. The IRS receives your client’s form and corresponds to the information you send. Independent contractors receiving over $600 in compensation from a single client throughout the tax year will have to submit a 1099-MISC application. If you do not receive the form by mail, you should contact the customer and send them a form. It is your responsibility to ensure that you submit your 1099-MISC, as the IRS will see. Some customers may not be aware that they need to send the form, so you should always proactively approach your 1099-MISC.
You must report your income regardless of whether or not the customer sends the form. Although there is a $600 threshold for filing a 1099-MISC, this does not mean that you do not have to report income below that amount. Typically, taxpayers who file their taxes using a 1099-MISC form can use Schedule C to calculate their earned income and qualifying deductions. Those taxpayers who are self – employed or self – employed contractors must also submit a Schedule SE to account for Medicare and social security, which the taxpayer may have to pay. There is no reason to make it difficult to file your taxes with a 1099-MISc. Actually, the process is practically completed for you when you use the tax preparation software. Those who submit a 1099-MISC can maximize their benefits by using deductions and exemptions, and independent contractors are often eligible for a wide range of money – saving options.