Glossary term
What is Form 1099?
Short answer
Form 1099 is a US tax form a business sends to contractors it paid, to report what they earned.
Form 1099, explained for tree service owners
If you pay an independent contractor above the yearly limit set by the tax agency, you usually must send them a 1099 form after the year ends, and file a copy. Ask for a form W-9 from each contractor before you pay them, so you have their details. Keep payment records all year, not just in January. Missing forms can bring penalties. This is a short explanation, not tax advice. Your accountant can confirm the current rules and limits for your business.
Related terms
- Independent contractor
An independent contractor is a person who works for themselves and is paid per job, not an employee of your company.
- Payroll tax
Payroll tax is the tax withheld from employee pay plus the matching tax the employer pays on wages.
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