Form 1099

To report your income and expenses from your 1099 activity, use Schedule C: Profit or Loss From Business, which is then attached to your Form 1040 (your personal tax return). You must also complete Schedule SE to calculate your self-employment taxes if your net profits from your business exceed $400 for the year.
As a self-employed 1099 income earner, you are responsible for the self-employment tax on top of your regular tax on your net profits. The 2013 SE tax is 15.3%.
You can deduct ordinary and reasonable business expenses against your 1099 income. So you are only taxed on your Net Profit, not your total 1099 income.

Generally, any business must file a 1099 if it paid money in excess of $600 to an individual during the year. This includes payment for contract services as well as interest, capital gains or dividends.
There are more than 15 different types of Forms 1099, each for reporting different kinds of income.
These are forms used by the Internal Revenue Service to track individual income that isn't reported on a W-2 as wages.
Contract workers and investors usually have more income on Forms 1099s than on a W-2.
The business and entities that make these payments have the obligation to prepare and file Form 1099.

The filer must send the 1099 forms to the recipient by the end of January. They should mail Forms 1099 and 1096 by the end of February, unless submitting electronically, in which case the deadline is March 31.
A 30-day extension can be obtained by filing Form 8809 prior to the original deadline.
A professional tax preparer who is requesting an extension for more than 50 different filers must submit Form 8809 electronically.

To complete a Form 1099, you will need the taxpayer's name, address and taxpayer social security numbers. Resident and nonresident aliens who are not eligible for social security, will have to acquire an individual tax identification number.
The IRS recommends the employer request the taxpayer complete Form W-9, W-9S, or W-8 (if a foreign person) to request his taxpayer identification number.

Generally, file Form 1099-Misc for each person you paid at least $600 in services, rents, prizes and awards, other income payments or medical and health care payments.
Gross proceeds of $600 or more paid to an Attorney.
Any recipient with federal or state withholding regardless of amount.
At least $10 paid for Royalties or Broker payments in lieu of dividends or tax-exempt interest
Any fishing boat proceeds.
Generally, payments to corporations (except of Legal Services) are exempt from the filing requirements.

For the states of AK, CA, CO, DC, HI, ID, IL, IN, IO, KS, MD, MI, MN, MO, MT, NE, NE, ND, OK, OR, SC, DS, TN, UT, WA, WI, WY
Dept of the Treasury
IRS Center
Kansas City, MO 64999

Generally, report payments to independent contractors on Form 1099-MISC in Box 7.

Do not use Form 1099-MISC to report employee business expense reimbursements.
Report payments made to employees under a Non-accountable plan as wages on Form W-2.
Generally, Payments made to employees under a Accountable plan are not reported as wages on Form W-2.

The term Attorney includes a law firm or other provider of legal services
Attorney's fees of $600 or more paid in the course of your trade or business are reportable in Box 7.
Gross proceeds (such as for a case settlement) paid to Attorneys are reportable in Box 14.