A 1099-MISC is a U.S. Internal Revenue form that reports compensation you have paid during the year to an individual who is not your employee. When you use a contractor, consultant, free-lancer, etc., you are required to file a 1099-MISC if the total amount of compensation paid to that individual that year is more than $600.
Your tax preparer can handle the 1099 filing for you. It must be sent to the contractor (recipient) by January 31st, so the person has it in time for tax-return filing purposes, and filed with the IRS and Social Security Administration by the end of Feburary. You will need the person’s Social Security or Federal ID number, which you can get by requesting a W-9 (another IRS form) from them.
There are also online services that will prepare 1099s for you. I have used FileTaxes.com for a number of years. It’s quick and easy and costs $3.79 per form. They will prepare the form, send a copy to the recipient and file it with the IRS and SSA for you, and you can download a copy for your own records.
Alternatively you can fill out and file the paperwork yourself. You probably already know that you can obtain IRS forms, including the 1099-MISC and W-9, by going to www.irs.gov.
And as a side note, if you yourself are a contractor and your customer doesn’t send you a 1099-MISC, no harm done, but you are still required to calculate and report to the IRS the total income received that year.
[One final note: FileTaxes.com can also file W-2s and 941s for you. 941s cost a bit more.]
Read all about it on the IRS site.