What form must be used to report amounts paid to independent contractors over $600?

The requirement to report amounts paid to independent contractors over $600 is fulfilled by using Form 1099, specifically the 1099-NEC (Non-Employee Compensation) form. This form is designed for reporting various types of payments made to individuals who are not considered employees, including independent contractors, freelancers, and other self-employed individuals.

The key aspect of using Form 1099 is that it allows businesses to report payments to the IRS and provide recipients with a record of income earned. If a business pays an independent contractor $600 or more in a calendar year, it is obligated to issue a Form 1099-NEC to document that payment. This form must be submitted by January 31 of the following year to the contractor and also sent to the IRS.

In contrast, the other forms listed serve different purposes. Form W-4 is used by employees to inform employers of their tax withholding preferences. Form W-2 is issued by employers to report wages paid to employees and taxes withheld, not independent contractors. Form 1040 is the standard individual income tax return form used by taxpayers to report their annual income to the IRS. Each of these forms addresses distinct reporting and tax obligations that do not apply to independent contractor payments.