To prepare the 1099-MISC form, you will need to calculate the total amount paid for each vendor for the past calendar year.
For each 1099-MISC you prepare, you will need to include the following information about your business:
- Your Business Name
- Your Business Address
- Your Federal Employer ID Number
You will need all of the recipient’s ID numbers, meaning either the SSN or the Federal EIN for all forms. You will find this on form W9 that you (should have) collected from your contractor prior to hiring them.
The following are all of the boxes on the 1099-MISC form to be filled out where appropriate with the correct payment amounts:
- Other Income
- Fishing boat proceeds
- Federal Income Tax Withheld
- Medical and health care payments
- Non-employee compensation
- Substitute payments in lieu of dividends or interest
- Direct sales of $5000 or more of consumer products for resale
- Crop insurance proceeds
- Excess golden parachute payments
- Gross proceeds paid to an attorney
Boxes 15a and 15b require you to record Section 409A deferrals and income. Section 409A refers to a section of the Internal Revenue Code which has to do with non-qualified deferred compensation plans. Check with your CPA if you think you may have to report non-qualified deferred compensation to one of your contractors.
Boxes 16, 17 and 18 require you to enter state and local information. The form allows you to enter information for up to two states. An additional form must be filled out if more than two states are needed. Here you must enter the State Withholding Tax (box 16), the State/Payer’s State Number (17), and the total State Income (18). Unless you withheld state or local income tax from the payments made to the contractors, boxes 16-18 will be blank.