Form 1099-MISC

If your organization pays $600 or more during the calendar year to an individual or business, you may be required to issue them a Form 1099-MISC.

IRS Form 1099-MISC is used to report the following types of payments of $600 or more:

• 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
• generally, the cash paid from a notional principal contract to an individual, partnership, or estate
• payments to an attorney
• any fishing boat proceeds.

There is an exception for reporting the above payments on a 1099.  In general, if the payment is to a corporation or a limited liability corporation (LLC) treated as a C or S corporation, a 1099 is not required.  However, all payments to attorneys of $600 or more are required to be reported on Form 1099-MISC.

In order to properly prepare Form 1099-MISC, you will need to obtain the recipient’s legal name, address and EIN or Social Security Number.  It is easiest to request this information prior to payment to them.  You can also request that the recipient complete Form W-9, which asks for this information.  All of this information is necessary to properly complete and file a 1099.

As the payor, you are required to furnish the 1099 to the recipient by January 31st.  The return is also due to the IRS by January 31st for nonemployee compensation reported in box 7.  For other types of payments reported on Form 1099, the due date to the IRS is February 28th if you file on paper or March 31st if you file electronically.

Posted by: Carrie Minnich, CPA