Gig Workers and 1099 filings
- Gig workers are individuals or businesses that provide on-demand services for companies. Gig companies act as intermediaries, overseeing workers' tasks, payments, and taxes.
- Gig companies are also responsible for filing a 1099 form for the various gig workers at the year-end.
Forms Required to file for Gig Workers
Request Taxpayer Identification Number and Certification from gig workers to verify identity details such as TIN, name, and address.
Used to report the payments made to gig workers if the total payment for the respective tax year is $600 or more.
Used to report miscellaneous payments (rents, awards, etc.) if the total payment for the respective tax year is $600 or more.
Used to report online card transactions and third-party network transactions if the total payment for the respective tax year is $600 or more.
TaxBandits also supports Forms 94x,
View All forms
W-2, and 1099 that employers are
required to file.
A Comprehensive 1099 Filing Process
for Gig Economy
1. Request W-9 from Gig Workers
Collect Forms W-9 electronically using TaxBandits. You can send your recipients an email request to complete and e-sign the form. Send requests individually or in bulk.
You can also import recipient details from Xero, QuickBooks, Zoho Books to
request a W-9.
Note: If the contractors fail to provide W9 or provide incorrect information, you must withhold 24% from the contractors' payment per the IRS backup withholding rules.
2. Enter your Gig workers' Details and Payouts
You can enter the gig workers’ details including name, address, TIN, and payment details manually, or upload them using an Excel / CSV file when you start filing your 1099 Form.
You can also import payee details from QuickBooks, Xero, Freshbooks, & Zoho books.
3. Form Generation and Validations
You can import your gig workers' W-9 details and payout records and easily prepare Form 1099 at the year-end.
TaxBandits will validate your form against IRS Business Rules, TIN matching, and USPS address validation to ensure accuracy before transmitting it to the IRS and State.
4. IRS and State Compliant
You can review the generated Form 1099s for any errors and make changes if required.
Once done, let TaxBandits e-file your 1099s with Federal and State agencies.
5. Recipient Copy Distribution
TaxBandits will distribute the 1099 copies to your recipients per IRS requirements via postal mail .
You can also enable the e-delivery of 1099 copies to the recipients through our secure online portal.
Looking for an API Solution to Automate 1099/W9?
- TaxBandits offers a secure API solution to integrate with your gig software and Automate W-9 & 1099 Forms.
- With our API integration, you can request and manage W-9s for TIN information and keep a record of all payments made to 1099 contractors.
- This eliminates complications and ensures a smooth 1099 generation and filing process at the year-end. Learn more
Exclusive Form 1099 Filing Features for
TaxBandits validates the TIN your recipients provide on W-9 using the SSA database.
Postal Mail 1099 Copies
TaxBandits prints, mails, and distributes 1099 form copies after verifying the address using the USPS Database.
E-Deliver 1099 Copies
Gig workers can easily access and download their 1099 form copies from our secure online portal.
Our live support team is here to assist you at any time by phone, email, and live chat.
Industry-leading Data Security Protocols
- Data Security is our top priority.
We have multiple standards in place for safeguarding our clients'
and recipients' data.
- All data, including Personal Identifiable Information (PII) is encrypted and stored in a secure, HIPPA Compliant server.
- TaxBandits servers are HackerProof and COMODO Certified, preventing any unauthorized access.
- TaxBandits is an AICPA SOC 2 Certified Provider.
- Easily add another layer of security to your account by enabling multi-factor authentication.
Frequently Asked Questions
Are ‘gig workers’ considered employees?
It depends. Gig workers usually work as independent contractors, though they might also be employees based on the hours per week they work.
If an individual is providing on-demand services, they will be considered a non-employee.
For instance, an Uber driver is a gig worker who connects as a contractor with Uber to provide rides to Uber clients. The driver can accept or decline a particular assignment. In order to meet the tax requirements, Uber should file a 1099 form for the contractor drivers.
To be considered an Uber employee, an individual must have an employment contract working 40 hours a week with Uber. In this case, Uber is required to file a W-2 instead of a 1099 for them.
What happens if your contractor fails to provide a valid TIN?
You must deduct backup withholding from contractors’ payments if they fail to provide a valid TIN number or show that they are exempt from backup withholding.
Backup withholding is calculated using IRS tax rates of 24% for U.S. citizens and resident aliens, or 30% or 10% for non-resident foreign persons, depending on the types of income.
You must report backup withholding amounts on 1099 forms for each contractor and submit amounts deducted for backup withholding to the IRS.
Are there any IRS penalties for failing to meet the 1099 requirements?
The IRS will impose penalties for not filing Forms 1099 on-time.
The penalties will be imposed even if you fail to distribute the copies to the recipients by the deadline and for providing statements that are incomplete or inaccurate. The penalty ranges from $50/return to $270/return.
If you don’t file a Form 1099 electronically with the IRS on time, you may be subject to Form 1099 penalties. Learn more about 1099 penalties.