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Filing Form 1099-MISC: What You Need to Know

10.25.2018

A Form 1099-MISC reports certain types of income, other than salary, that aren’t reported on a W-2 form. If you’re a business owner or independent contractor, it’s important to determine if you will need to issue or file these tax forms.

Here are some of the most important items to know as your company prepares to issue and file 1099 forms.

What information do you need?

To file a 1099-MISC, several key pieces of information about the recipient are required. Usually, this information is collected by a W-9 form. This can be filled out by the individual before providing services. The most important pieces needed are:

  • The tax identification number, which is either the Social Security Number or company Federal Tax Identification Number
  • The official name that corresponds with your tax identification number. To avoid possible matching notices with the IRS, it’s important to ensure that the name matches exactly what is on file with the IRS
  • The street address, city, state and zip code

Requirements for filing

You should file Form 1099-MISC for each person to whom you have paid during the year:

  • at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest
  • at least $600 in:
    • rents
    • services performed by someone who is not your employee
    • prizes and awards
    • other income payments
    • medical and health care payments
    • crop insurance proceeds
    • cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
    • any fishing boat proceeds
    • payments to an attorney

In addition, use this form to report any direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

Deadlines for filing

For a specific year’s payments, companies must send 1099-MISC forms to recipients by January 31 of the following year. Companies must also send copies of each 1099-MISC form that is issued to the IRS. The deadline to send the forms to the IRS is January 31, whether 1099s are filed electronically or by mail.

Other important items to note

  • There is no need to send 1099-MISC forms to corporations. This includes S corporations and C corporations. Exceptions include: attorney’s fees, even if the lawyer is incorporated, gross proceeds paid to an attorney (such as for legal settlements) and payments to for-profit medical providers.
  • 1099-MISC forms only need to be sent for services provided for a business, not for goods or merchandise. 1099-MISCs also do not need to be sent for non-business, personal services.
  • Typically, companies are only required to send 1099-MISC forms to recipients who have been paid $600 or more in a calendar year. However, if a company paid for services using a credit card or third-party payment network, the rules for 1099-K are applicable for reporting.
  • Keep in mind that your state may also have requirements and separate deadlines for reporting 1099s and filing them.
  • Anyone issuing more than 250 1099-MISC forms is required to e-file with the IRS. Even, if less than 250 are being filed, e-filing is still the preferred method.

If you have any questions about 1099 filling requirements or need assistance with electronic filing, please contact Robbin Boos, Practice Coordinator, Entrepreneurial Services Group at 314.983.1385.

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