Using Form 1099-MISC

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Reporting Income Payments Using Form 1099-MISC

Form 1099-MISC is used to report certain types of payments made in the course of a trade or business. If you're in business or self-employed, you may need to submit this report to both the Internal Revenue Service and the person or business whom you paid.

When is Form 1099-MISC Required?
Businesses 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 fishermen,
crop insurance proceeds,
medical and health care payments,
prizes and awards,
proceeds paid to attorneys,
rents,
services (including parts and materials), and
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, and
royalties.

Reporting such payments is required if the recipient of the payment is not a corporation -- for example, when the recipient is an individual, partnership, a limited liability company treated as a partnership or sole proprietorship. Payments made to corporations are required in the case of medical and health care payments and in the case of legal fees paid to attorneys. Other types of payments made to corporations may be reported using Form 1099-MISC, but is not required.

Expanded 1099-MISC Reporting Starting in 2011 for Rental Property Owners Has Been Repealed
Rental property would have needed to issue a 1099-MISC for payments relating to their rental properties beginning in the year 2011, but this requirement has been repealed by the Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011.

Expanded 1099-MISC Reporting Starting in 2012 Has Been Repealed
1099 reporting would have been expanded starting with the year 2012, but this provision has also been repealed by the Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011. Prior to repeal, reporting would have been expanded to include payments made to corporations and as well as to include payments for goods and property. The 1099-MISC expansion was originally legislated as part of the health care reform package.


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