At the beginning of each year, employers must provide Form 1099-MISC for nonemployee compensation, to each noncorporate service provider who was paid at least $600 during 2019. These payments must be reported to the recipients by January 31, 2020. The following are common payments that must be reported on Form 1099-MISC:

  • Rents

  • Nonemployee compensation - Services performed by someone who is not your employee (including parts and materials) Example: fees to subcontractors or directors

  • 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 

You must also file Form 1099-MISC for each person from whom you have withheld any federal income tax (report in box 4) under the backup withholding rules regardless of the amount of the payment. 

 

Nonemployee compensation (box 7) is required to be reported to the Internal Revenue Service by January 31, 2020. All other payments reported on Form 1099-MISC, Form 1099-INT, Form 1099-DIV, and Form 1099-R are required to be reported to the Internal Revenue Service by February 28, 2020. If your trade or business is required to issue any of the above referenced information returns, a Form W-9 (Request for Taxpayer Identification Number and Certification) should be requested from the payee in order to obtain and report the correct information.

The following payments are not reportable on Form 1099:

 

  • Payments for merchandise, telegrams, telephone, freight, storage, and similar items

  • Payments of rent to real estate agents or property managers

  • Wages paid to employees (report on Form W-2, Wage and Tax Statement)

  • Military differential wage payments made to employees while they are on active duty in the

  • Armed Forces or other uniformed services (report on Form W-2)

  • Business travel allowances paid to employees (reportable on Form W-2)

  • Cost of current life insurance protection (report on Form W-2 or Form 1099-R, Distributions from Retirement Plans, Insurance Contracts, etc.)

  • Payments to a tax-exempt organization including tax-exempt trusts [IRAs, HSAs, Archer MSAs, Coverdell ESAs, and ABLE (529A) accounts], the United States, a state, the District of Columbia, a U.S. possession, or a foreign government

  • Payments made to or for homeowners from the HFA Hardest Hit Fund or similar state program (report on Form 1098-MA)

  • Compensation for injuries or sickness by the Department of Justice as a public safety officer disability or survivor's benefit, or under a state program that provides benefits for surviving dependents of a public safety officer who has died as the direct and proximate result of a personal injury sustained in the line of duty

  • Compensation for wrongful incarceration for any criminal offense for which there was a conviction under federal or state law. See section 139F, Certain amounts received by wrongfully incarcerated individuals

  • Payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). An exception to this, you must report payments to corporations for the following: 

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  • Fish purchases for cash 

  • Medical and health care payments

  • Attornerys' fees

  • Gross proceeds paid to an attorney

  • Substitute payments in lieu of dividends or tax-exempt interest

  • Payments by a federal executive agency for services (vendors) 

 

Upcoming Changes for 2020

 

Any nonemployee compensation payments in 2020 will be required to be reported on Form 1099-NEC. Form 1099-NEC is required to be reported to the Internal Revenue Service by February 1, 2021.

The 1099 filing rules are extensive. If you have any questions, please feel free to contact our office for assistance. You can also obtain complete instructions on the IRS website at www.irs.gov/forms-pubs/about-form-1099-misc.

1099 Requirement Guidelines

Mt Pleasant
619 S Mission St
Mt Pleasant, MI 48858
Phone: (989) 772-4673
Fax: (989) 772-6371
Midland
2927 Manor Dr
Midland, MI 48640
Phone: (989) 832-7833
Fax: (989) 631-1509
Canadian Lakes
10024 Buchanan Rd
Stanwood, MI 49346
Phone: (231) 972-7178
 
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