1099 REPORTING REQUIREMENTS

Every business, person conducting business and nonprofit organizations have 1099 reporting requirements and must file informational returns (Federal Forms 1099) with the Internal Revenue Service for certain payments made during the course of the calendar year.

These payments include, but are not limited to:

•  Payments to persons, including partnerships and limited liability companies (excluding corporations and S-Corps) of at least $600 for services (i.e. casual labor) in the course of a trade or business.
•  Payments to persons, including partnerships and limited liability companies (excluding corporations and S-Corps) of at least $600 for rents in the course of a trade or business.
•  Payments to persons including partnerships and limited liability companies (excluding corporations and S-Corps) of at least $10 for interest (i.e. interest on officer’s loans) in the course of a trade or business.
• Gross proceeds of $600 or more paid to attorneys, including corporations, for services in the course of a trade or business.

These informational returns generally must be provided to the recipients or postmarked by January 31st.  Since the 31st is a Saturday this year (2015) you have until  February 2nd.  The Federal filing generally must be postmarked for filing with the IRS by February 28th but since that also lands on a Saturday this year (2015) you have until  March 2^nd.

Failure to file these returns can result in a penalty for each 1099 return not filed. 

To properly report the information required on Form 1099, you need to have the provider’s taxpayer identification number (TIN). It is best to require the provider to fill out and give you a Form W-9, Request for Taxpayer Identification Number and Certification, before work is done or paying for the services.  Trying to get this information after the fact can be difficult especially if there is no-longer a business relationship. W9

The following payments are NOT REQUIRED to be reported on 1099’s, although they are taxable to the recipient:

• Any and all payments made personally that are not part of a trade or business.
• Payments that do not total the minimum reporting requirement (i.e. $599 or less for services)
• Generally, payments to a corporation (payment made to a business ending in “Inc” or “Corp”)
• Payments for tangible items (i.e. office supplies, equipment)
• Payments of rent paid to a real estate agents

Please feel free to contact us if you have any questions and are unsure of your filing requirement.

Tax Happens LLC 813-304-5569