1099 Forms

Entities are often required to issue 1099 forms for payments made to vendors, contractors, shareholders, clients etc. They normally need to be filed in the beginning of the year following the year for which the form is being filed. There are many online applications that can help electronically file the forms, but you are free to mail them as well. Copies must be filed with IRS, state department of revenue and a copy must be provided to the recipient of the payments. Let's review the most common ones.

1099-MISC

File form 1099-MISC for each person to whom you have paid during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.

  • At least $600 in:

    • Rents.

    • 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.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

1099-NEC

1099-NEC is used to report nonemployee compensation, mostly payments to independent contractors. The annual filing threshold is $600.

1099-DIV; 1099-B; 1099-INT; 1099-K

Other 1099 forms include DIV, INT, B, K

Form 1099-DIV is used by banks and other financial institutions to report dividends and other distributions to taxpayers and to the IRS if the distributions exceeded $10

Form 1099-INT is used for whom you paid interest of over $10.

Form 1099-B must be filed by a broker or barter exchange for each person:

  • For whom, they sold stocks, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc., for cash,

  • Who received cash, stock, or other property from a corporation that the broker knows or has reason to know has had its stock acquired in an acquisition of control or had a substantial change in capital structure reportable on Form 8806, or

  • Who exchanged property or services through a barter exchange.

Form 1099-K is used by credit card payment processors such as Stripe or Square to report gross payments to the business if the payments exceeded $600. A business entity is likely to receive one if it accepts credit cards.