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Many small business owners prefer to send 1099s through email or an online service. The IRS has several requirements for furnishing Form 1099 electronically. You can include this information in their contract or via email. Some online services may handle this for you.

?An independent contractor is someone who provides services to a business but is not paid as an employee. At the beginning of each year, those people are given an IRS Form 1099 showing amounts paid. This is different from someone on the payroll as an employee, who will receive a Form W-2.

You don't have to file a 1099-MISC for payments for non-business related services. This includes payments you make to independent contractors for personal or household services-for example, payments to babysitters, gardeners, and housekeepers. Running your home is not a profit-making activity.

Notify the contractor in writing of the immediate need to convert him to an employee and what identification information you need to effect this change. Document the date and time these records were produced in the employee's file.

Every situation is different, but the general steps are as follows: Obtain the independent contractor's Form W-9, Request for Taxpayer Identification Number and Certification. ... Provide compensation for work performed. ... Remit backup withholding payments to the IRS, if necessary.

Independent Contractor law, which requires that workers perform a service "outside the usual course of the business of the employer" to be classified as independent contractors." Therefore, workers who deliver papers may remain independent contractors.