Who Do I Give a Form 1099? Chandler CPA and Tax

 

Brought to you by your local Chandler Arizona Tax Preparers and Chandler CPA

CBSNews gives us the following guidelines for knowing when to file a form 1099.

"(MoneyWatch) With more folks being self-employed, and paying for the services they need to run their businesses, it's become important for these individuals to know IRS rules and requirements for issuing 1099-Misc forms.

If during the calendar year you hired contractors in the course of running your trade or business, you may have to issue them a 1099-Misc. The IRS makes this requirement so that you remind folks you pay to include such payments on their tax returns. Additionally you would need to furnish the IRS with a copy of the 1099-Misc.

The current rules are:

- Payments to any one contractor of $600 or more during the tax year in the course of your trade or business. The contractor must be an individual or partnership; payments to corporations currently do not require a 1099, except for noted below.

- Professional fees to an attorney, doctor or other professional are included, as long as they are made in the course of your trade or business. Do not issue a 1099 for payments that are for personal expenses.

- Payments to corporations are included only if they are for medical, health care, legal or fishing activities (yes, fishing!).

Payment of $600 or more in rent for office space, machines, equipment or land in the course of your trade or business will also require a 1099-Misc if the payment was made to an individual or partnership, not a corporation.

Payments include commissions, fees, interest, rents, royalties, annuities and any other type of compensation or income to a single recipient.

There are a few additional requirements to keep in mind:

- The IRS deadline for mailing 1099 forms in respect to payments made in 2017 to your recipients is Jan. 31, 2018.

- If you inadvertently fail to issue a proper Form 1099, the IRS can assess a $50 penalty. The penalty for each intentional failure can be $100 or more.

It's important to note that individuals are not required to send 1099-MISC for personal payments. Individuals are not required to send a 1099-MISC to an independent contractor to whom you have made a personal payment unrelated to your trade or business. So you don't have to issue a 1099-MISC to your landscaper or house painter....not yet anyway."

Still have questions? Call us today to discuss your immediate or future needs!  Jodie Fish, Manager of the Bookkeeping company can be reached at jodie@azbookkeeping.net or feel free to call her at (480) 203-2100. We also offer tax solutions as well as payroll for officers of S-corps.  If interested, please contact our tax department at info@njfishcpa.com or 480-857-3048.