~ Used to request a taxpayer identification number (TIN) for reporting on an information return the amount of $600 and above paid throughout the year.

~ Form W-9 should be given to an independent contractor before they start the job to ensure you have the required information to complete Form 1099-Misc or Form 1099-NEC.

~ Invoice - form submitted from sub-contractor to contractor in order to receive payment for work completed. (This will download at the bottom left of your screen.)

INDEPENDENT CONTRACTOR END OF YEAR FORMS:

~ Form 1096, Annual Summary and Transmittal of U.S. Information Returns - used to transmit paper information returns like Form 1099-Misc or Form 1099-NEC.

~ Form 1099-Misc, Miscellaneous Income - used for each person in the course of your business to whom you have paid the following during the year.

~ At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends or tax-exempt interest (see the instructions for box 8).

~At least $600 in:
~ 1. Rents (box 1);

~ 2. Prizes and awards (box 3);

~ 3. Other income payments (box 3);

~ 4. Generally, the cash paid from a notional principal contract to an individual, partnership, or estate (box 3);

~ 5. Any fishing boat proceeds (box 5);

~ 6. Medical and health care payments (box 6);

~ 7. Crop insurance proceeds (box 9);

~ 8. Payments to an attorney (box 10) (see Payments to attorneys, later);

~ 9. Section 409A deferrals (box 12); or

~ 10. Nonqualified deferred compensation (box 14).

~ You must also file Form 1099-MISC for each person from whom you have withheld any federal income tax (report in box 4) under the backup withholding rules regardless of the amount of the payment.

~ Form 1099-NEC, Non Employee Compensation - used by payers to report payments of $600 or more made in the course of a trade or business to others for services. Prior to 2020, these payments were reported in box 7 on Form 1099-MISC.

The following are some examples of payments to be reported in box 1:

~ Professional service fees, such as fees to attorneys (including corporations), accountants, architects, contractors, engineers, etc.

~ Fees paid by one professional to another, such as fee-splitting or referral fees.

~ Payments by attorneys to witnesses or experts in legal adjudication.

~ Payment for services, including payment for parts or materials used to perform the services if supplying the parts or materials was incidental to providing the service. For example, report the total insurance company payments to an auto repair shop under a repair contract showing an amount for labor and another amount for parts, if furnishing parts was incidental to repairing the auto.

~ Commissions paid to nonemployee salespersons that are subject to repayment but not repaid during the calendar year.

~ A fee paid to a nonemployee, including an independent contractor, or travel reimbursement for which the nonemployee did not account to the payer, if the fee and reimbursement total at least $600. To help you determine whether someone is an independent contractor or an employee, see Pub. 15-A.

~ Payments to nonemployee entertainers for services.

~ Use Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, for payments to nonresident aliens.

~ Exchanges of services between individuals in the course of their trades or businesses. For example, an attorney represents a painter for nonpayment of business debts in exchange for the painting of the attorney's law offices. The amount reportable by each on Form 1099-NEC is the fair market value of his or her own services performed. However, if the attorney represents the painter in a divorce proceeding, this is an activity that is unrelated to the painter's trade or business. The attorney must report on Form 1099-NEC the value of his or her services. But the painter need not report on Form 1099-NEC the value of painting the law offices because the work is in exchange for legal services that are separate from the painter's business.

~ Taxable fringe benefits for nonemployees. For information on the valuation of fringe benefits, see Pub. 15-B, Employer's Tax Guide to Fringe Benefits.

~ Gross oil and gas payments for a working interest.

~ Payments to an insurance salesperson who is not your common law or statutory employee. See Pub. 15-A for the definition of employee. However, for termination payments to former insurance salespeople, see the instructions for box 3 of Form 1099-MISC.

~ Directors' fees as explained under Directors' fees, earlier.

~ Commissions paid to licensed lottery ticket sales agents as explained under Commissions paid to lottery ticket sales agents, earlier.

~ Payments to section 530 (of the Revenue Act of 1978) workers. See the TIP under Independent contractor or employee, earlier.

~ Fish purchases for cash. See Fish purchases, earlier filed for each qualified independent contractor that worked for you.