More people are being required to file 1099-misc forms all over the country, because the irs is diligent in making sure you pay your taxes – even if you're an independent contractor. Your client sends a 1099-MISC form to the agency, and the IRS compares it to the form you submit. Ignoring a 1099-MISC is a bad idea, because the IRS will track you down.
Anyone who is considered an independent contractor needs to fill out a 1099-MISC form from their client, provided they were paid in excess of $600 for the year. Just because you didn't receive anything in the mail doesn't mean you don't have to file. Contact your client and verify that a form has been sent, and make sure it was mailed to the correct address. It's possible your client doesn't even realize that a form needs to be sent.
Even if the client doesn't send any form, you are required to report the income. Often, people think if they make less than $600, they don't have to report their income, however that is not the case. A 1099-MISC form is the first step to compiling your tax return.
Independent contractors who use a 1099-MISC form to file their taxes usually have to fill out a Schedule C, which calculates the earned income and any expenses that can be deducted. In addition to a Schedule C, contractors will have to file a schedule se, which will tally the amount owed for Medicare and Social Security deductions.
Filing a 1099-MISC doesn't have to be a difficult process. A tax preparation program can help make filing your taxes relatively simple. It's important to focus on maximizing your benefits, as independent contractors often have quite a few available to them.