1099-MISC, Miscellaneous Income, must be mailed by January 31, 2018 to each person a company has paid during the course of business in 2017. A person subject to 1099 reporting is defined as an individual who is a U.S. citizen or U.S. resident alien, a partnership or association created or organized in the U.S. or under the law of the U.S., a U.S. estate, or a domestic trust. You are in the course of doing trade or business if you are operating with the intention of making a gain or profit. Generally a person must have been paid for the following to receive a 1099 (per IRS):
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- At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;
- At least $600 in rents, services (including parts and materials), 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, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
- Any fishing boat proceeds; or
- Gross proceeds of $600 or more paid to an attorney.
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For more specific instructions and special circumstances please refer to the 1099-MISC instructions: https://www.irs.gov/pub/irs-pdf/i1099msc.pdf
If you are sending a 1099 to someone, we recommend that you have a Form W-9 on file for that person. Form W-9 is an informational form that you give to the person you are doing business with to obtain their correct taxpayer identification number (ex: SSN or EIN). Once the person you are doing business with has completed the form, they should return the form to you for your records. W-9s should be updated annually to ensure that the information is correct and current.
For more information about W-9s please see the following:
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For more general instructions about informational forms, such as Form 1099-MISC, please see the following instructions: https://www.irs.gov/pub/irs-pdf/i1099gi.pdf
If you have any questions about 1099s or W-9s, please do not hesitate to contact our office.