Basic 1099 Filing Requirements
If your trade or business made payments in 2022, you are most likely required to file information returns to the IRS (Forms 1099-NEC, 1099-MISC, etc.) by January 31, 2023. Keep in mind that common types of business expenses, such as rent and professional fees may be subject to reporting.
Penalties for not filing a correct 1099 form and/or not furnishing the payee statement currently range from $50 to $580 PER return. Your federal income tax return includes questions that ask if you made payments which would require you to file Form 1099 and, if yes, if you filed the required forms.
The following reviews the Basic 1099 Filing Requirements as well as a complete list of 1099 forms.
Form 1099-NEC for the following payment types:
- Services performed by independent contractors or others – not employees of your business (formerly box 7 of form 1099-MISC)
Form 1099-MISC for the following payment types:
- Rent (Box 1)
- Royalties, (Box 2), $10 or more in royalties (or broker payments in lieu of dividends or tax-exempt interest)
- Other Income such as Prizes and awards (see IRS Instructions for Form 1099-MISC, Box 3)
- Backup withholding or federal income tax withheld (Box 4)
- Crew members of your fishing boat (Box 5)
- To physicians, physicians’ corporation or other supplier of health and medical services (Box 6)
- Substitute dividends or tax-exempt interest payments and you are a broker (Box 8)
- Crop insurance proceeds (Box 9)
- Gross proceeds of $600 or more paid to an attorney (Box 10)
Form 1099-A, Acquisition or Abandonment of Secured Property
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
Form 1099-C, Cancellation of Debt
Form 1099-CAP, Changes in Corporate Control and Capital Structure
Form 1099-DIV for Dividends or other distributions to a company shareholder
Form 1099-G, Certain Government Payments
Form 1099-INT for Interest on a business debt to someone (excluding interest on an obligation issued by an individual)
Form 1099-K for Payments to merchants or other entities in settlement of reportable payment transactions, that is, any payment card or third-party network transaction
Form 1099-LTC, Long Term Care and Accelerated Death Benefits
Form 1099-OID, Original Issue Discount
Form 1099-PATR, Taxable Distributions Received from Cooperatives
Form 1099-Q, Payments from Qualified Education Programs
Form 1099-R for Distribution from a retirement or profit plan or from an IRA or insurance contract
Form 1099-S, Proceeds from Real Estate Transactions
Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
You are NOT required to file information return(s) if any of the following situations apply:
- You are not engaged in a trade or
- You are engaged in a trade or business and
- the payment was made to another business that is incorporated and was not for medical or legal services (Do file 1099-MISC for payments to a Partnership, LLC (unincorporated LLC), LLP, sole proprietor, individual and corporations for medical and legal services) or
- the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
1099-NEC forms are due to recipients and IRS by January 31, 2023. For all other payments reported on other 1099’s, file by February 28, 2023.
Information needed to file 1099-MISC:
- Your entity’s legal name, address, tax ID #, phone # and contact name
- Each payee’s name, address, tax ID#, total paid in calendar year, category of
IRS Form W-9 is used to request payee legal name, tax ID # and entity type. Provide this IRS form to every vendor / payee you are going to or did make a payment to. Payers are required to backup up withhold Federal Income Tax (at 24% when a payee does not provide a TIN). Retain completed W-9 forms in your record. See attached W-9.