Form 1099-MISC: Miscellaneous Income is used for reporting certain payments made in the course of your trade or business. Personal payments are not reportable.
When is Form 1099-MISC required?
Businesses or self-employed individuals will need to fill out a Form 1099-MISC for persons, vendors, subcontractors, independent contractors, and others in the following circumstances:
$600 or more per year is paid for:
- Cash payments to fish or other aquatic life you purchase from anyone engaged in the trade or business of catching fish
- Any fishing boat proceeds
- Crop insurance proceeds
- Medical and health care payments
- Prizes and awards
- Proceeds paid to attorneys
- Services (including parts and materials)
- Other types of payments not covered by another information reporting document
$10 or more per year is paid for:
- Broker payments in lieu of dividends or tax-exempt interest
Steps to Take to Prepare for 1099 MISC Forms:
- Request that your vendors, contractors and other payment recipients submit to you a Form W-9 (Click here to download Form W9). The W-9 will provide you with the correct legal name, address and taxpayer identification number for the vendor, which is the information you will need when preparing any 1099-MISC forms.
- You should also keep track of your payments in your bookkeeping system to know the exact amount you paid the recipient for the year.
Penalties for Filing Form 1099-MISC late:
- $30 penalty for filing a 1099 for being 30 days late; maximum penalty $250,000 per-year ($75,000 for small businesses)
- $60 penalty for filing a 1099 more than 30 days late, and before August 1; maximum penalty $500,000 per-year ($200,000 for small businesses)
- $100 penalty for filing a 1099 on or after August 1; maximum penalty, 500,000 per-year ($500,000 for small businesses)
- $250 penalty for intentional failure to file
Deadlines for 1099-MISC forms:
- January 31: Provide the recipient with his or her copy of the Form 1099-MISC to report income for the previous calendar year
- February 28: Mail the Form 1099-MISC to the IRS
- March 31: Or, electronically file 1099s with the IRS
For more information on Form 1099-MISC, or any of our other small business services leave a message below, or contact Deb Herr at 440-449-6800.