The Internal Revenue Service, an Agency of the Department of Treasury is the revenue service of the United States Government. It is Responsible for Collection of taxes and for the enforcement of the Internal Revenue Code. The IRS for the collection of taxes publishes tax forms which the tax payers are required to choose from and use for calculating and reporting their various tax obligations. Towards this end, the IRS publishes a number of forms which are available for tax payers and tax exempt organizations to choose the forms according to their usage and as mentioned before calculate and report their tax obligation.

There are over 800 forms and schedules for the users to choose. These forms are used as a type of information returns. It is a requirement for organizations in the United States to undergo Tax Information Reporting to report Wage and Non- Wage payments made in the course of their trade or business to the IRS and this is done through filing of the Tax Information Returns, of which there are currently more than 30 types available and these provide the primary cross-checking measure to the IRS to verify accuracy of Tax Returns filed by Individual Tax payers. The Most familiar of these Tax Information returns to most people even outside of the Taxation circle is the Form W-2 which reports wages and other forms of compensation paid to employees.

There are also many forms used to report Non- Wage income of which the most recognizable is the IRS FORM 1099. Information returns being documents which report certain miscellaneous types of income there are a vast number of IRS FORM 1099 variants to complement all manner of different types of income for such purpose.IRS FORM 1099 series is used to report various types of income other than wages, salaries, and tips. The ubiquity of the form has also led to use of the phrase “1099” to refer to the independent contractors themselves. In 2011 the requirement has been extended by the Small Business Jobs Act 2010 to payments made by persons who receive income from rental property.

it is pertinent to note that In the United States, any company or organization engaged in a trade or business that pays more than $600 to an independent contractor in one year is required to report this to the Internal Revenue Service (IRS) as well as to the contractor, using IRS Form 1099 This form is merely a report of the money paid; independent contractors do not have income taxes withheld from their pay as regular employees do. Even though FORM 1040 is used by a greater number of Individuals, it is IRS FORM 1099 which is of more importance due to the fact it can be used for calculation of Tax in the Non wage payments segment(As has been mentioned before). Each payer filing these must complete an IRS Form 1099 for each covered transaction. Four copies are made: one for the payer, one for the payee, one for the IRS, and one for the State Tax Department. As of 2011 several IRS FORM 1099 have been created depending upon each transaction.
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