If you pay an independent contract $600 or more you must issue IRS Form 1099 Misc and give a copy to the independent contractor and the IRS. But, helpers who work for you caring for children are not independent contractors, so you should not be issuing Form 1099 to them!

Do I need to issue a 1099 to my housekeeper?

If you pay a housekeeping service or you pay a person who advertised as a housekeeper but who also does a lot of other clients, then you are hiring a small business person. You don’t issue them any tax forms such as a 1099-MISC unless you are a small business yourself and your business has hired this person.

How to file a 1099 for an employee?

Steps to file a 1099 Employee. If you’re using a 1099 employee, you will first want to create a written contract. If you pay them $600 or more over the course of a year, you will need to file a 1099-MISC with the IRS and send a copy to your contractor.

How is employee pay tallied on Form 1099?

In a nutshell, employee compensation is tallied on a Form W-2 and contractor compensation is calculated on a Form 1099. The W-2 also shows how much federal income tax as well as state and local taxes were withheld. Form 1099 doesn’t show withheld taxes because the contractor is responsible for paying those.

Is there a problem with the 1099 form?

IRS computers have no problem with that. If you call or write the payer and raise the issue, you may be buying trouble. The payer may issue the 1099 form incorrectly. Or you may end up with two of them, one issued in the ordinary course (even if it never got to you) and one issued because you called.

Do you need a 1099 for a PayPal payment?

Payments made by PayPal or another third-party network, gift card, debit card, or credit card also don’t require a 1099. That’s because the card issuer or network is reporting these payments using Form 1099-K. There are also special rules for lawyers; you need to send your lawyer a 1099 for payments of more than $600 even if she is incorporated.