Form 1099-Misc

Income reported on 1099-Misc forms – This form is filed by businesses for each person/ partnership to whom at least $10 in gross royalty payments, or $600 for rents or services in the course of a trade or business was paid. Some payments are not required to be reported on Form 1099-Misc, although they may be taxable to the recipient.

The due date of the Form 1099-Misc to each recipient is January 31st, and the ‘red ink’ copy or the ‘magnetic image’ copy of the 1099s and a summary Form 1096 is due to the IRS by February 28th.

Payments for which a Form 1099-Misc is not required may include:

• Payments to a corporation;
• Payments of rent to real estate agents;
• Wages to employees – Form W-2 is used to report employee income;
• Business travel allowances;
• Personal payments are not reportable.

Payments for which a Form 1099-Misc is required may include:

• Professional service fees (including accountants, architects, contractors, subcontractors, etc. – when they are not incorporated);
• Fees paid by one professional to another, such as fee-splitting or referral fees;
• A fee paid to a non-employee, including an independent contractor, or travel reimbursement for which the non-employee did not account to the payer, if the fee and reimbursement total at least $600.00;
• Exchange of services (Barter transactions);
• All fees paid to attorneys;
• Prizes and awards.

Form W-9 is completed and signed by the payee to obtain the federal tax identification number, or social security number and address of each payee.

Federal Forms can be obtained at www.irs.gov.

Prepared by Wilke and Associates, CPA’s
Contact: David Wilke at 412-278-2200, or visit our website at www.wilkecpa.com.

The above is for informational purposes only and is not meant to be tax planning advice.