From the course: Finance Foundations for Solopreneurs
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Understanding the 1099
From the course: Finance Foundations for Solopreneurs
Understanding the 1099
- In business jargon, it's common to refer to subcontractors, or self employed contractors, as 1099s. Solopreneurs might hire 1099s or you might be the 1099 worker yourself. Either way, you've got to understand the concept, implications and requirements in order to maximize the tax value for you and your business. Let's start by defining a 1099 worker. In reality a 1099 isn't a worker at all. Rather a 1099 is an Internal Revenue Service form that is used to report income received through sources other than traditional employment. The IRS uses 1099s to serve as evidence that income is paid to a specific taxpayer. Now if you hire a 1099 worker, this likely will be for services for which you don't have the time or skill. Things like bookkeepers, graphic artists, photographers, copywriters, editors. When hiring a 1099 worker, it's a best practice to get them to complete the 1099 tax form immediately. That way you have it on file. Because you'll need it later and it's easiest to get in the…
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