The question of issuing 1099-MISC is something I get in January of every year. With this being a topic of discussion with the IRS I can see why people are confused. Per the 2012 instructions for Form 1099-MISC, if you are someone engaged in a trade or business you should issue Form 1099-MISC to anyone whom you have PAID cash or a check, not what you have accrued, 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, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish you purchase from anyone 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 fish boat proceeds
- Gross Proceeds of $600 or more paid to an attorney (even if a corporation)
Generally, payments made to a corporation or tax-exempt organization do not get reported on Form 1099-MISC. You are also not required to report payments made with a credit card.
How do you know if the person you are paying is not a corporation? The best way is to have each vendor fill out Form W-9 Request for Taxpayer Identification Number and Certification. This form can be printed off the IRS website (www.irs.gov). Now is the time to start going through your vendor files and see whom you need to send this form to. By getting this form completed you will have approximately 99% of the information needed to prepare your Form 1099-MISC.
Form 1099-MISC is due to all payees by January 31st of every year and to the IRS by February 28th of every year. You are unable to print these forms from the IRS website however you can contact the IRS at 1-800-TAX-FORM or go to http://www.irs.gov/Businesses/Online-Ordering-for-Information-Returns-and-Employer-Returns to place an order. You can also purchase them through office supply stores.
For further information on Form 1099-MISC you can visit www.irs.gov. If you need assistance in preparing Form 1099-MISC you can contact our office.