Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

Form 1099 Reporting Requirements

It is necessary to file form 1099-MISC, Miscellaneous Income 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
  • $600 or more in rents, crop insurance proceeds, payments to an accountant and attorney
  • $600 or more for medical health care payments, including the purchase of supplies and payments for lab fees
  • Payments totaling $600 or more to individual contract workers for services rendered
  • Any fishing boat proceeds

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment. You must also file Form 1099-MISC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Trade or business reporting is only reported on Form 1099-MISC when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under Section 501(c) or (d), farmers’ cooperative that are exempt from tax under Section 521, and widely held fixed investment trusts. Payments by more than 10 children or more than five other individuals are reportable on Form 1099-MISC.

Payment Types:

  • Attorney, fees and gross proceeds (Due to IRS February 15th)
  • Auto reimbursements, nonemployee
  • Awards, nonemployee
  • Bonuses, nonemployee
  • Car expense, nonemployee
  • Commissions, nonemployee
  • Compensation, nonemployee
  • Direct sales of consumer products for resale
  • Fees, nonemployee (i.e. Accountant)
  • Health care services
  • Medical services
  • Mileage, nonemployee
  • Nonemployee compensation
  • Prizes, nonemployee
  • Rental Expense
  • Rental Income
  • Royalties
  • Vacation allowance, nonemployee

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Due Date to IRS (unless indicated otherwise): February 28th*
Due Date to Recipient (unless indicated otherwise): January 31**

By Dan Blackwell