It’s that time of the year to think about issuing 1099’s. The IRS has begun focusing heavily on taxpayer compliance with information reporting laws.

You must report payments on Form 1099-MISC only when the payments are made in the course of your trade or business; personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. For this purpose, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements.

The basic rules for form 1099-Misc are:

1099-Misc needs to be issued to vendors that are not corporations for:

  • Rents (over $600) or Royalty payments (over $10)
  • Payments for services (over $600) (not employees receiving W-2’s)
  • Attorneys (over $600 and whether or not a corporation)

The 1099-Misc is due to the recipient by January 31 and to the IRS by February 28.

If I can be of any assistance, please contact me!