If their LLC is taxed as an S- or a C-Corp you do not . Staying up to date with tax filing guidelines is essential to running your business. This is especially true when paying sole proprietors and operators of single-member LLCs. This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional. Nothing in this article constitutes tax or accounting advice.
IRS Form 1096, officially known as the Annual Summary and Transmittal of U.S. Information Returns, is — as its official name implies — a summary document. It is submitted as an accompanying document with other IRS information forms, including forms 1097, 1098, 1099, 3921, 3922, 5498 and W-2G. A business owner’s ultimate guide to IRS Form 1096 — including who needs to file and step-by-step instructions. Make checks and money orders payable to Comptroller of Maryland. We also recommend you include your Social Security number on your check or money order.
Even the tax preparers who are not so required, must file Form 8948 if they choose paper filing, providing an explanation for why they are not filing electronically. On the other hand, Form 1099-NEC, Nonemployee Compensation, is solely for reporting payments to independent contractors. Independent contractors can use Form 1099-NEC to get the necessary information to file their personal tax returns. Form 1099-NEC is an Internal Revenue Service information form, used to report payments to non-employees each year. You must file this report with the IRS if you paid $600 to a freelancer, independent contractor, or other individual or business who provided services to your company during the year.
Before you can get started filling out IRS Form 1096, you’ll need to complete the necessary information returns for your business, whether that is your 1099-MISC forms or any of the other forms listed above. The information monster high freaky fusion doll on these returns, as well as the number of returns and the different versions you’re submitting, will be relevant to completing Form 1096. IRS Form 1096 only accompanies these information returns when they’re filed by mail.
Then, you’ll mark a check in box 7 if you’re filing this Form 1096 with 1099-MISC forms that report NEC, or non-employee compensation. NEC would apply to your business if you’re filing 1099-MISC forms to report payments you’ve made to independent contractors. If this is the case, you would check box 7; if not, you would leave it blank. When you have employees, you send Form W-2 to them so they can use information on Form W-2 and file their personal tax returns. Handling your independent contractor taxes is pretty easy.The first thing you need to do to prepare a 1099 is that you make sure you have all of the correct information on your contractors or vendors. Vendors should have already filled out Form W-9 and provided it to you when you engaged their services.