If you used contractors in your home based business during 2009, it’s time to file the form 1099-MISC for each contractor you used. One of the advantages you have as a home based business is that you often can get by without hiring actual employees. You can usually get by hiring contractors to do specific projects or occasional tasks.
Examples of contractors commonly used in home based businesses are bookkeeper, attorney, web designer, and consultants. If you paid $600 or more to any one contractor during the year, you need to file a 1099-MISC.
There are two deadlines for this; Jan 31 and Feb 28 (2010). The first deadline is the date by which you should have sent the contractor’s copy. The second date is the date by which you send the information to the IRS. This gives each contractor a chance to review the figures you are reporting to make sure it matches their records. The form is used by the IRS to ensure contractors accurately report their income.
Don’t feel like hassling with it? Well just like paying someone to do those jobs you don’t want to, you can pay someone to file your 1099-MISC for you. Outright.com (link below) will file your 1099-MISC for you before both cutoffs and handle the forms for you. You simply provide the information for them on your contractors. It’s $5 per filing.
Whether you’re a home based business who has used contractors or you are a service provider on the receiving end of these forms, you need to be aware of the deadlines coming up.