Hey want to know something important for business that basically no streamer does? You’re supposed to file a 1099-MISC for any contractor you paid more than $600 in a year. That emote artist? Yup. Your manager? Yup. Your lawyer? Yes, but on the 1099-NEC.
Housekeeping
EIN: Employer Identification Number. The thing you want to do a free filing for so you don’t have to give your contractors your Social Security Number.
W-9: The form you should have sent your contractors to get their official information including Taxpayer Identification Number (TIN), address, and legal name.
When do you need to file a 1099
I kind of spoiled it in the introduction, but you’re supposed to file a 1099-MISC for any contractor you pay more than $600. You could also do it for other contractors, which could be helpful for them when it come time to file their taxes. They of course should be tracking what they charge just as you’re tracking what you spend, but maybe they aren’t that organized.
Beyond that, you need to actually file the 1099-MISC with the IRS by January 31st! That’s waaaaaay before most of your tax deadlines. The reason there is that your contractors need the information to do their taxes.
However, if you paid someone via PayPal you don’t have to send a 1099, PayPal handles it.
How do you file a 1099
There are some e-file services where you can pay them to file the forms for you. Additionally, you could try to submit form 4419 with the IRS but they’ll only approve you if you have conforming software (hint: you don’t). Otherwise, it’s still on paper. What a wonderful world we live in.
You’ll need two important things: the amount you paid the contractor and their information from the W-9 you hopefully had them fill out.
After that, you need to order a form from the IRS. You can order it here. Unfortunately, since you can’t e-file a 1099-MISC on your own you need to get the official, scannable paper form from the IRS. Alternatively, you can use software like Intuit to e-file for a small fee ($15).
After that, you fill out two copies. Copy A gets sent to the IRS and copy B goes to the contractor. Once you’ve done that you need to file a form 1096 (of course it’s on paper!) with the IRS to track the total amount you’ve 1099-ed for the year.
Conclusion
This is one of those annoying but necessary steps you need to take as a business owner. Plus, you’re being super helpful to the people who you rely on (emote artists, managers, etc) when it comes to their taxes.
You don’t have to figure this out alone. This is what we do- help streamers make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.
