updated - July 13, 2020 Monday EDT
According to recent research, around 16 million Americans are self-employed. If you are a contractor or hire contractors, you know how difficult taxes can be. The answer lies with the humble 1099 pay stub.
Self-employment pay stubs are often hard to come by for contractors. Often, you have to ask to get one, and even then, you may not actually receive one.
You should issue your contractors with a 1099 pay stub. This makes things easier for both you and them. Read on and find out why.
1. It Provides a Record of Wages
When tax season rolls around, having a 1099 pay stub makes both of your lives easier. If you are a contractor without one, you'll be left having to trawl through your bank statements to complete your tax return. No one needs that.
If you're an employer who hasn't issued a 1099 pay stub, it leads to additional work for your accounting team. If you're a small business hiring an external accountant, this means more money lost.
When you issue or are issued a 1099 pay stub, you have a record of your wages. It's clear as day and makes submitting your taxes a breeze. What's more, generating pay stubs is easy: click here to learn more.
2. A 1099 Pay Stub Shows Where Your Money is Going
If you run a small business, you know how important data is. Knowing where your money is going and how much of it is being spent on various things is crucial to staying afloat.
When you issue an independent contractor pay stub, you can file it away in your spreadsheet. Keeping track of expenses is made much easier when you have pay stubs to count on.
3. You Can Use Them to Get a Loan or Rent a Home
Having proof of income isn't just important for taxes. If you've got a 1099 pay stub, you can demonstrate to a lender or a prospective landlord that you are in good financial shape.
This can help you get a loan or rent a house or apartment. Without these pay stubs, proving income becomes trickier.
4. Deductions and Withholdings Can Be Added Easily
A 1099 pay stub is great for both sides of the contractor relationship. When filing your taxes, it's important to not only have a record of pay but of deductions and withholdings.
When you make a pay stub, this information can easily be added. It's easy, it's official, and it makes everything easier.
Navigating the world of pay stubs is tricky. It's easy to get tangled in legalese and other jargon. Hopefully, we've shown you why a 1099 pay stub is great whether you're a contractor or an employer.
Do you want to read more great business articles? Then check out our Biz/Tech section!
TOP 10 FRANCHISES OF 2020