The IRS Form 1099-MISC is an information return that businesses must issue to individuals and contractors who earn more than $600 in a year from goods and services.
Who Uses IRS Form 1099-MISC?
IRS Form 1099-MISC is used by any business that pays an individual or outside company more than $600 in any calendar year, or $10 in royalties, including:
- Rents
- Awards and prizes
- Medical and health payments
- Crop insurance proceeds
- Fishing boat proceeds
- Section 409A deferrals
- Non-qualified deferred compensation
- Payments made to attorneys
Form 1099 for Independent Contractors
Form 1099-NEC was introduced in 2020. It complements Form 1099-MISC for non-employee income. 1099-MISC forms will no longer be issued for independent contractors or freelancers performing work for you. Instead, you will issue this form.
Where Can You Obtain Form 1099-MISC?
You can download Form 1099-MISC from the IRS website. It can also be requested for delivery via mail.
How to Fill Out Tax Form 1099-MISC?
You will need the Taxpayer Identification Numbers (TINs) of the beneficiaries if they have them, or Social Security Numbers (SSNs). It’s a good idea to have all entities you pay money to complete a W-9 form at the time they contract for your services. The W-9 form is a “Request for taxpayer identification number and certification.” It will provide you with the necessary information at the start of your business relationship when completed.
What to Do If You Don’t Receive Form 1099-MISC?
Contact the company you worked with if you were paid one of these forms of income above the required thresholds but did not receive a 1099-MISC form. Ask them to reissue the document. The form does not need to be submitted with your tax return, but it is important to gather and report the total of all income sources on your tax return that has been reported to the federal tax office. This can help avoid triggers for your return to be audited.
Can Form 1099-MISC Be Submitted Online?
Form 1099-MISC can be submitted online by the business that is the issuing agent. This is also part of any commercial tax preparation software.
Where to Mail Form 1099-MISC?
You can submit Form 1099-MISC to one of three regional centers of the federal tax office located in Austin, Texas, Kansas City, Missouri, and Ogden, Utah.
Filing Form 1099-MISC Without an Employer Identification Number
You are still required to complete Form 1099-MISC for anyone you paid if you are a sole proprietor and do not have an Employer Identification Number. In this case, you should use your Social Security Number. You may find yourself in this position if you contracted with other parties and met the filing threshold of paying $600 to any of them during the year.
Penalties for Not Filing the Form
Small businesses with total revenues under $5 million can be fined $50 for each form if late 1099-MISC forms are filed within 30 days of the due date. The penalty rises to $110 per form if filed after 30 days but before August 1. Then, it goes up to $270 per 1099-MISC. Ignoring the form altogether can result in a $550 penalty per form.
Frequently Asked Questions
Does the method of payment affect the rules for filing Form 1099-MISC?
You are exempt from the obligation of issuing 1099-MISC forms for any payments made via credit card or through an online payment service like PayPal. In those cases, the payment processor is required to complete and file Form 1099-K.
Are there any business entities that do not need Form 1099-MISC?
Entities that are incorporated only need to receive Form 1099-MISC in certain cases: if cash payments for fish are made for resale purposes, if the attorney who was paid for their services has been incorporated, if you made payments for medical care, or if the payments were instead of tax-exempt interest or dividends. Talk to a tax advisor if you made payments for any of these goods or services to ensure you’re on the right track.
Source:
https://www.thebalancemoney.com/how-to-file-irs-1099-misc-forms-without-ein-14088
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