When do I send a 1099 Misc and who do I send them to?

When you own or operate a trade or business and have made certain payments during the year that constitute income to the persons who received those payments, the payments total $600 or more, and those persons are NOT your EMPLOYEES, you have to issue a Form 1099.


1099's are issued to non-employees only.  Do not issue a 1099 to an employee unless they worked for you as and independent contractor before hire or after separation from employment.

1099's are usually issued for payees that provide services, prizes & awards, not tangible goods.  Follow this link for a more complete IRS list.  Payments that are exempt from 1099 reporting include: payments for merchandise, communication services such as telephone, freight, storage, and similar items.

Generally, you do not have to report payments to CORPORATIONS on Form 1099-MISC, but there are some exceptions, including: payments for medical or health care services, cash purchases of fish, attorneys' fees, gross proceeds paid to attorneys, substitute payments in lieu of dividends or tax-exempt interest, and payments made by a federal executive agency for services. 

Rent payments are reported on 1099 R, interest payments are reported on 1099 INT.

1099's must be post-marked to the recipient by January 31st of the year following payment, and a copy must be submitted to the Internal Revenue Service along with a 1096 summary sheet.  Large filings of 250 or more individual forms must be filed ELETRONICALLY.

For more information visit www.irs.gov.

This material is for informational purposes only and not intended and financial, legal or tax advice. Please consult your finance, legal or tax professional to confirm the accuracy of all information.