How to Prepare a 1099 for a Contract Worker?

The first step to preparing a 1099 MISC form for a contractor is to determine this is the correct form to be filed. 1099 MISC forms are for services done by someone who is not an employee. The non-employee compensation must amount to $600 or more.

The second step is to determine if you will be filing electronically or filing paper forms. If you have more than 250 contractors you may be required to e-file. W2 Mate, a 1099 software, supports both electronic filing and the printing of paper forms (copies B, C, state 1 and 2).

If you don’t already have W2 Mate installed, you can download a free demo from the 1099 software download page .

Once W2 Mate is up and running:

1. Click company, on the toolbar, new company

2. Enter company information including 1096 form information

A. Business name, address, EIN and state ID

B. 1096 information is the person to contact and contact information and Filer’s name if different from the company

3. Click 1099 recipient >new recipient in this window enter recipient ID which is the social security number and the type of 1099 form (W2 Mate supports multiple 1099 forms including 1099 Misc, 1099 R, 1099 Int, and 1099 Div forms). The recipient’s basic information is entered in this window including name, address and social security number.

4. Click 1099 form in this window, on the right side of the screen, in this area you will enter the money paid to the contractor. The most common income will be entered in Box 7 non-employee compensation.

5. Some users may prefer to import their recipient information (optional feature). W2 Mate gives you two options importing a CSV file or importing directly from Quickbooks. This 1099 filing software allows the user to map the appropriate 1099 recipient information and/or gives you a step by step guide to import form Quickbooks.

6. It is now time to print 1099 Misc forms. Per IRS regulations 1099 Misc A and 1096 forms need to be printed to a red ink laser form. W2 Mate offers a package  that includes software and red ink laser forms called 1099 Kit. In the print options screen you can choose your recipients and choose which copy of the 1099 form to print. If printing to blank paper choose print a copy, in the drop down menu, choose the copy you wish to print. You may also print instructions on the back of the form. This form printing software allows the user print, email or e-file 1099 forms.

A. Printing 1099 forms- print to blank paper or use preprinted paper forms available individually or in complete sets.

B. Email 1099 forms- available for 2009 this 1099 software has an option which will create a password protected pdf file (optional feature) which can be emailed to the recipient. This option is available in the 1099 form screen. Select the folder to which you are saving the file, select the password option you prefer and choose the recipients.

C. Electronically file 1099 forms (optional feature) – W2 Mate generates the file the user will upload to the IRS to complete the e-file process. The IRS requires the transmitter to register for a TCC (complete instructions and links to the IRS in the 1099 software). Once you have registered you will fill in the form with the transmitter’s name, company and contact information. W2 Mate allows the user to e-file state forms if your state participates in this combined filing program. After you have chosen the output file you will log on to the IRS website and upload the file.

7. Click 1096 form, this window should be filled with the information you have already entered in the 1099 program. You will select the type of 1099 form to print then select print. Per IRS regulations you will print to a preprinted 1096 red ink laser form. A 1096 form is a transmittal summary of the included 1099 Misc forms.

1099 MISC Forms must be mailed to recipients no later than January 31st of the following tax year. The recipients receive 1099 Misc copies B and 2. The deadline moves back to March 31st if you electronically file the forms. The 1099 Misc A and 1096 forms are to be sent to the IRS no later than February 28th. If required 1099 Misc 1 is to be sent to the recipient’s state. 1099 Misc C is the payer‘s copy.