Taxes?? Independant Contrator?

Question

I was a political campaign manager and i hired several consultants to do work for us. I was wondering how I file the 1096 form and give my employees a 1099 form if I have no tax ID number. Can i just have them put this income down as "other income" on their 1040s?

Answer 1

1) It is easy to get a Tax ID Number. Just go to http://www.irs.gov/pub/irs-pdf/fss4.pdf , fill out the application, and mail it in! Alternatively, you may wish immediate issuance of the ID Number by completing Form SS-4, online, at https://sa2.www4.irs.gov/sa_vign/newFormSS4.do.

2) Perhaps, depending on your State's employment rules (but the various State rules are pretty much uniform, nationally), your "independent contractors," more appropriately, might be considered employees. You may wish to review http://www.irs.gov/businesses/small/article/0,,id=99921,00.html .

3) In answer to your last question, yes, the recipient of non-employee compensation may enter his/her income on Form 1040 (2006), page 1, line 21, "Other Income," but that taxpayer may, also, have self-employment tax due. If so, use Schedule SE to calculate that.

4) If the recipient was an independent contractor and he/she had related business expenses, consider using Schedule C, instead of putting the gross amount on Form 1040, page 1, line 21.

5) If the recipient was an employee and he/she had related employee business expenses, use Schedule 2106 and Schedule A, for those expenses.

I hope the above information helps!

Phil
http://www.phillipfostercpa.com/advisory.html

Answer 2

No, if they worked for it, it's non-employee compensation, not "other income". The difference is the requirement to pay self-employment tax.

If this was done in 2006, you're running a little late - the forms were supposed to be out a couple months ago. If it's for work in 2007, then you're fine and have plenty of time to sort things out.

Answer 3

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