FINANCE
Who needs to fill out a 1099-MISC form? What is it for?
The tax form is related to payments your business has made to people that are not employees and covered by other tax forms.
Tax season is drawing to a close and if you run a business then there are a small number of tax forms you need to be aware of. One of these is the 1099-MISC form, which is used for miscellaneous payments made by your company.
If you paid someone who is not your employee, such as a vendor, contractor, or freelancer, and you paid them $600 or more in the course of your trade or business, then you are required to issue a 1099-MISC form to that person and to the IRS.
You need to 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.
It’s important to note that the 1099-MISC form is not used to report payments made to employees, as they are instead reported on Form W-2.
The form can be found on the IRS website and must be filed with the IRS by March 31, 2023 if you file electronically. The deadline for paper has already passed.