1099-MISC Filing Requirements for Business
The IRS continues to increase its scrutiny of Form 1099 reporting by businesses. The IRS uses Form 1099s submitted to them to match to the recipients reporting of income on their tax returns. Failure to comply with Form 1099 filing requirements may result in substantial penalties.
Who must file Form 1099-MISC?
• All entities engaged in a trade or business (sole proprietorship, partnerships, and corporations)
• Landlords engaging in the business of renting property
Nonprofit organizations and federal, state or local governmental agencies
• Trusts of qualified pension or profit-sharing plans of employers
Form 1099-MISC General Requirements:
Businesses will need to file a Form 1099-MISC for each person, vendor, subcontractor and independent contractor, under the following circumstances:
If you have paid $600 or more per calendar year for rents, services (including parts and materials) performed by someone that is not your employee, prizes and awards, medical and health care payments, crop insurance proceeds, cash payments to fishermen, payments to attorneys, and other types of payments not covered by another information reporting document. Reporting such payments is generally required if the recipient of the payment is not a corporation – for example, when the recipient is an individual, estate, partnership, a limited liability company treated as a partnership or sole proprietorship. However, payments made to corporations that are for medical and health care payments, attorney fees and those from which taxes have been withheld MUST be reported, regardless of the entity type. For more information regarding Form 1099-MISC requirements, visit the IRS Website.
All recipients must receive a copy of their Form 1099 by January 31, 2017 and copies of the Form 1099 and Form 1096 must be sent to the IRS by January 31, 2017, as well as any state agency that requires it.