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  • Writer's pictureEdgar

1099's Are Due January 31. Now Is The Time To Get Ready.

All businesses that pay independent contractors $600 or more in a calendar year must file 1099s with the IRS by January 31st each year.

Who gets a 1099?

File Form 1099-MISC for each person or business to whom you have paid during the year:

  • At least $600 in Rents

  • At least $600 in Medical and health care payments.

  • At least $600 in Payments to an attorney.

File Form 1099-NEC for payments to non-employees for services of $600 or more in a calendar year.

This is a list of the common payments that must be reported. For the complete list see Instructions for Forms 1099-MISC and 1099-NEC.

Who Doesn't Get a 1099.

  • Payments to a corporation

  • Payments to a limited liability company ONLY if they have certified to you on Form W-9 that they are taxed as an S-corporation or C-corporation.

  • This does not apply to payments for medical or legal services.

What is Non-employee Compensation?

If the following four conditions are met, you must generally report a payment as NEC.

  • You made the payment to someone who is not your employee.

  • You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).

  • You made the payment to an individual, partnership, estate, or, in some cases, a corporation.

  • You made payments to the payee of at least $600 during the year.

Get a Form W-9 From All Vendors That Will Receive a 1099.

Penalties for not filing 1099s.

  • Not more than 30 days late: $50 per return or statement - $194,500 maximum

  • 31 days late – August 1: $110 per return or statement - $556,500 maximum

  • After August 1 or Not at All: $270 per return or statement - $1,113,000 maximum

  • Intentional Disregard: $550 per return or statement - No limitation


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