Contractors and End of Year Taxes
Unsure of what to do when it comes to end-of-year taxes/tax season prep for your contractor therapists? Hopefully, this will clarify some things for you.
First, I am not a CPA, nor am I an attorney at the time this is written. Consult a tax professional to get more up-to-date and qualified information on this topic.
Second, this is going to be a simple breakdown of the process to give you the skeleton of what is needed. You, of course, will still need to complete it on your own or do so with your CPA.
Steps
Forms - You will want to obtain a copy of a 1099-MISC and a Form 1096 (if not filing electronically). Each contractor that meets the requirements (listed below) will require their own 1099-MISC.
1099-MISC Requirements - At least $600 in:
Rents.
Prizes and awards.
Other income payments.
Medical and health care payments.
Crop insurance proceeds.
Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
Payments to an attorney.
Any fishing boat proceeds.
To fill it out - You will need to use the W-9 forms you collected when hiring to fill out the 1099-MISC forms. You will also need to use your software (Quickbooks, Simple Practice, etc.) to determine the amount of payout you have provided to each contractor during the year. Use all of this information to fill out the form. Most of your payments will be listed under #3 above.
To File - You will typically file online, but you can also file a hard copy by sending it to the proper IRS location. For Texas, that’s the Austin IRS location.
Copies to Contractors - Be sure to provide a copy of the 1099—MiSC to the respective contractor. Also save a copy for your own records and your own CPA.
Author: Christopher Missimo
