As we tend to receive the most questions related to Form 1099-MISC, we would like to provide you with some general guidelines and resources in order to assist you with the accurate and timely filing of Form 1099-MISC.
Reportable Payments
For payments made in the course of your trade or business (including not-for-profit organizations), payments in the amount of $600 or more (unless otherwise noted) related to the following items should be reported:
- Services performed by independent contractors (or other non-employees of your business);
- Prizes and awards (does not include amounts paid to employees);
- Rents;
- Royalties ($10 or more);
- Legal services performed; and
- Any person from whom you have withheld any federal income tax under the backup withholding rules (regardless of the amount of the payment).
Recipients
Generally, amounts paid for the above items to individuals, sole proprietors and partnerships should be reported. Payments to tax-exempt organizations and corporations (C or S Corporations) are exempt.
Whether or not a 1099 should be issued to a limited liability company (LLC) will depend on how that company is classified for tax purposes. If treated as a single member LLC that is disregarded or as a partnership, payments are reportable. If treated as a C or S Corporation, payments are exempt.
Exceptions
All payments of at least $600 to attorneys should be reported, even if the attorney is a professional corporation.
Information Needed to File
Recipient information (i.e., name, address and tax identification number), amount paid during the calendar year and type of payment are required information.
To assist with procurement of the proper information required to file (i.e., missing taxpayer identification number, current address or tax classification status), you should obtain Form W-9, Request for Taxpayer Identification Number and Certification, from vendors as soon as possible.
Due Dates
- Recipient copy is due to be distributed by January 31, 2019.
- IRS paper filing is due by February 28, 2019—for all types except 1099-MISC Box 7.
- IRS electronic filing is due by April 1, 2019.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.