How To Create A 1099 Form For A Contractor

Missing a 1099 Form as an Independent Contractor? Why Requesting a New One Might Be a Bad Idea

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Tax season is here, and with the new tax deadline for 2021 set for May 17, many people are likely scrambling to gather all their paperwork, receipts and other information. You might even find you're missing a few forms. Independent contractors who didn't receive a 1099 often track down their clients to get the oversight corrected.

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Unlike the tax filing deadline for individuals, businesses were still required to send W-2 forms for employees and 1099-MISC forms for independent contractors by the usual deadline of Feb. 1, which means you should have received all the paperwork you need.

But what should you do if you don't receive your 1099 form by the deadline?

The IRS says you should report the oversight by calling 800-829-1040. You'll need to provide your name, address, phone number, taxpayer identification number and dates of the work, along with the payer's name, address and phone number.

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However, hefty fees are tied to missing IRS deadlines for 1099 forms. Large businesses that don't file a 1099 may incur penalties starting at $50 per statement, up to $3.3 million total. If the IRS proves the company intentionally disregarded the 1099, it could face penalties of $550 per instance with no limit.

There's a lot at stake for reporting someone for failing to send your 1099. And independent contractors aren't protected by the same laws that protect employees from being fired without due cause in some states. A company can simply stop working with an independent contractor at any time.

On the other hand, you could simply inform the company that you never received your 1099 and request a copy. But then you run the risk that they will re-file the form with the IRS and you'll ultimately receive two copies reflecting the same income, Forbes says. You'll have to pay taxes on double the amount you earned.

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There's a third option that protects you as a taxpayer: Report the income anyway, even without a 1099. Remember, you should always be reporting all your income to the IRS. Contractors don't have to submit 1099 forms to the IRS, they are just meant for your records to confirm the income you received.

If your client never filed the form, you will not get in trouble for reporting (and paying taxes on) more income than was reflected on your 1099s. You will pay taxes on that income just like any other earned income.

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If you aren't sure about the income you earned, Forbes contributor Robert W. Wood writes, you can request a transcript of your account from the IRS before you file. Then you will know which clients submitted a 1099.

Bottom line: Don't leave it to your employers or clients to track your income. Keep records of your income and expenses throughout the year to make tax time easier.

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Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

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