1099 Instructions

If you own your own business and need to pay subcontractors, you will want to know these 1099 instructions. The 1099 is used to expense out the money that has been paid to a subcontractor. 1099's are issued to people who work for you but are not your employees.

To follow these 1099 instructions, you will need:

• 1099 forms

• Company you paid name, address, EIN number

• Your company name, address, EIN number

• Amount paid to company

1. Box 1 – This is where you would report any rents paid. This can include real estate rental fees or rents pad for any equipment needed to complete jobs.

2. Box 2 - Royalties from gas, oil or other mineral rights are reported in box 2 of the 1099 form. This also included any royalties from copyrights or patents.

3. Box 3 – Most all other income goes in box 3 of the 1099 form. This income includes anything that does not fit into any category that has its own box.

4. Box 4 – This is the box that any federal income taxes that you have withheld. Most often this box is left blank.

5. Box 5 – This is the amount of money that is made from working on a fishing boat.

6. Box 6 – This is where medical and health care payments are recorded.

7. Box 7 – Non-employee compensation goes in box 7 on the 1099.

8. Box 16, 17, 18 – These boxes all have to do with state income amounts. The amount of state taxable income, state income tax withheld, and the state in which the tax was withheld for.