Do you need to issue form 1099 Misc?
Many small business owners ask me “Do I have to give out 1099 Misc forms?”
For many small business owners the answer may be yes. If you have paid anyone $ 600 or more you probably need to issue that person a 1099 Misc. The IRS refers to these payments as “Nonemployee Compensation.”
What is nonemployee compensation? If the following four conditions are met, you must generally report a payment as nonemployee compensation.
You made the payment to someone who is not your employee;
You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
You made the payment to an individual, partnership, estate, or, in some cases, a corporation; and
You made payments to the payee of at least $ 600 during
The following are some examples of payments what you would need to report on Form 1099 Misc.:
Professional service fees, such as fees to attorneys (including corporations), accountants, architects, contractors, engineers, etc.
Fees paid by one professional to another, such as fee-splitting or referral fees.
A fee paid to a nonemployee, including an independent contractor, or travel reimbursement for which the nonemployee did not account to the payer, if the fee and reimbursement total at least $ 600.
Payments to nonemployee entertainers for services. .
Payments to an insurance salesperson who is not your common law or statutory employee.
You are required to provide the form 1099 Misc by January 31st to the person who provided the service and a copy of the 1099 Misc is to be filed with transmittal form 1096 with the IRS by the end of February.
Blank forms 1099 can be obtained from the IRS at www.irs.gov/pub/irs-pdf/f1099msc.pdf
Blank forms 1096 can be obtained www.irs.gov/pub/irs-pdf/f1096.pdf
In order to have the information available to complete form 1099 Misc., you should have everyone that you pay as a nonemployee complete a form W9. Blank forms W9 can be obtained at www.irs.gov/pub/irs-pdf/fw9.pdf
If you have any specific questions about the 2011 1099 Form Misc please contact me here on Inside91 DeirdreMorrison or 919-435-8470.