It’s important to make sure that no mistakes appear on your 1099 forms prior to submitting them – a job that 1099 software is most helpful for. Nevertheless, figuring out exactly which software to choose can be of paramount importance, and in order to know all about what you need, you will have to know what 1099 reporting entails and which income types and specific 1099 you will need to keep track of.
Examples of 1099 Reporting Instances
1099 software can be used for a variety of reporting tasks. While employees may need to complete the W-2 form for the purpose of reporting on their income, independent workers and contractors use a 1099 form for that purpose, due to the fact that they are not subordinate to another business or employer.
As an independent worker, you have to submit 1099 forms for any income earned for both jobs performed online, such as software development or website design, and hands on work like landscaping, interior decorating, transportation services or manufacturing work.
Also, you will have to report any payments made to partners, business service providers or various other professionals, such as attorneys offering legal advice and support. For this purpose, you will have to use the 1099-MISC form.
When You Might Not Need 1099 Software
Of course, Form 1099-MISC completion software is only required when you actually have to file a 1099 form. As a contractor, therefore, it may be extremely vital that you find out exactly when you should or shouldn’t spend money on the software, by learning about all the instances when Form 1099 is not required.
Generally, there are a few instances when 1099 reporting might appear to be required, but is actually not needed at all:
• When the amount of your yearly payments to a single payee do not exceed $600;
• To account for payments made to corporations for various services – for example, paying a web developer company for a new website they design for you;
• When hiring a foreign freelancer who performs work for you outside the US (if they actually live and work in the US, you will need a 1099 form to report on the amount you pay them);
• When you issue payments through electronic means or credit cards;
• For personal payments that are not made in the course of business or trade.
For all other mentioned cases, you may find 1099 software company https://www.1099-etc.com, due to the remarkable convenience and ease of use it introduces into your workflow, as well as its ability to ensure that no errors or problems creep into the process.