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IRS 1099-MISC Form for Contract Workers

Contract workers, or freelancers, are workers who are hired on a project-by-project basis. The IRS 1099-MISC form is used by employers to document the earnings of contract workers.

More and more businesses are hiring contract workers because their costs are generally lower than W-2 employee costs.

This is because contract workers’ earnings do not require deductions of social security, income and state tax, unemployment, health insurance, or any other type of deferred compensation. Contractors are required to calculate any tax deductions and pay any taxes owed to the IRS on their own.

At the end of the tax year, the 1099-MISC form is sent by employers to any contractors hired during the year, and it is also submitted to the IRS for income tracking purposes.

Some examples of workers that would receive a 1099 form at the end of the tax year include freelance writers, artists, contract IT specialists, temporary laborers, and more.

The 1099-MISC form is the most popular form to report contract worker earnings. The other variations of the 1099 form are used to show interest and other types of earnings.

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Erich J. Ruth

Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.

If you have any questions or comments about our software, feel free to contact us at any time.

  1. David Sparks
    April 4th, 2013 at 13:29 | #1

    Independent contractor has agreement for $75k plus expenses. Contract incurs the expenses $19k provide and accounting and receipts to the payer. Payer reimburses the contractor for the expenses. What goes on the 1099? $75k? $94k? and in what blocks?

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