With tax season here, being an independent contractor and understanding what to do before the deadline can be tricky. There are things to be aware of like the correct 1099 Tax form, available tax refunds, and more. For this tax season, here are a few things you need to know to file your 1099 tax forms.
Four Tips for Filing Taxes
- For starters, how do you know if you receive a 1099 form? If you are an Independent Contractor (or self-employed) you are not considered an employee for an organization. 1099 forms are issued to report non-employment income. You will be able to file your taxes as a business entity or individual depending on how you filled out the W9 form. When filing taxes, business entities have the tax identification number (TIN) while individuals would use their SSN.
- Secondly, the IRS has replaced the 1099-MISC with the 1099-NEC for reporting non-employee compensation. The 1099-NEC is a facelift version of the 1099-MISC. The new form is available online. Businesses must provide recipients with their 1099 forms. Partners may be receiving 1099-NEC, 1099-K or both forms depending on the office you partnered with. To find out more information on other tax forms like the 1099 NEC and 1099 K, read our blog.
- Thirdly, as an employer, many forms can begin filling out as early as the fourth quarter. With the IRS, you don’t want to miss any deadlines or have errors occur. Be smart and get an early start. Help support the process and avoid penalties by filling forms early and without errors. Currently, the IRS filing deadline is April 18, 2022.
- Lastly, how to file your tax return? There are many programs out there to file online, some programs have a fee and others are free. The IRS offers Free File Alliance as an online solution to e-file. If you are an Independent Contractor, some companies offer discounts to use their exclusive online partner. At DDI, we offer our partners a discount with TurboTax and other perks that can be found on our Drive With Us page.
By partnering with DDI, we can simplify your tax season with Independent Contractors. From the beginning we collect and file important documents from the Independent Contractor. We establish a cadence to input necessary information to generate the 1099 form.
Our dedicated team is proactive in communication with Independent Contractors to ensure a seamless process. We provide 1099 forms in advance, online and follow-up several times to ensure delivery. For instance, in the case of the employer, we keep the forms and other tax records in case of an audit. Our risk management team stays up to date on 1099 compliance and can provide legal support if needed.
In conclusion, at DDI, we handle everything from your 1099 payroll, 1099 taxes and provide customer service to 1099 independent contractors for you!