General Rules for 1099’s

Generally, your company may be required to file form 1099 misc if you had made payments typically to sub-contractors for $600 or more during the year. 1099’s must be filed with the IRS and mailed to recipients no later than January 31 following the calendar year end.

Here are some examples:

  • Cleaning Services
  • Real Estate Sales Commissions
  • Lawn Maintenance
  • Casual Labor
  • Building Maintenance
  • Medical Payments
  • Attorney Fees
  • Other services performed by unincorporated individuals

Here are some General Rules for 1099’s.

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Specific Instructions

File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest
  • At least $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
  • Any fishing boat proceeds; or
  • Gross proceeds to an attorney.

Payments to attorneys – The term attorney includes a law firm or other provider of legal services. Attorneys’ fees of $600 or more paid in the course of your trade or business are reportable in box 7 of Form 1099-MISC.

Payments to corporations for legal services – The exemption from reporting payments made to corporations does not apply to payments for legal services. Therefore, you must report attorneys’ fees box 7 or gross proceeds box 14 as described earlier to corporations that provide legal services.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment. You must also file Form 1099-MISC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Please contact us if you should need assistance in preparing form 1099 misc.

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