Your Guide to Issuing 1099s
Do you own a business in San Diego? If so, you’re probably aware that you need to issue 1099s during tax season. But what type of 1099 should you issue? Who needs to get one? And what is the deadline for issuing them?
You’ll find all the information you need to know in this Semanchik Law Group guide.
Types of 1099 Forms
There are many different types of 1099 forms, including:
- 1099-A
- 1099-B
- 1099-C
- 1099-CAP
- 1099-DIV
- 1099-G
- 1099-H
- 1099-INT
- 1099-K
- 1099-LTC
- 1099-MISC
- 1099-NEC
- 1099-OIC
- 1099-PATR
- 1099-Q
- 1099-R
- 1099-SA
Most businesses only ever need to issue two of these 1099 forms – 1099-MISC and 1099-NEC.
Form 1099-MISC is used to report payments your organization made to non-employees that are not subject to self-employment taxes.
Form 1099-NEC, on the other hand, is the document your organization will need to use to report payments made to non-employees that are likely to be subject to self-employment taxes.
Who Needs a 1099 Form?
Generally speaking, you will need to issue Form 1099-MISC to individuals your company paid at least $600 in:
- Rent
- Prizes or awards
- Medical or healthcare payments
- Crop insurance proceeds
- Cash payments for fish you buy from anybody who is engaged in the trade of catching fish
- Cash paid from a notional principal contract to an individual, estate, or partnership
- Fishing boat proceeds, and
- Other income payments
You will also need to issue Form 1099-MISC to your attorney if you paid them more than $600 in the past twelve months.
The federal government requires you to issue Form 1099-NEC to any person who received over $600 in non-employee compensation from your business. According to the IRS, payments made by your organization qualify as non-employee compensation if they meet these conditions:
- The payment was made to someone who is not your employee
- The payment was made for services in the course of your business
- The payment is made to an individual, estate, or partnership
Non-employee compensation can include fees, commissions, awards, and benefits.
What is the Deadline for Issuing 1099 Forms?
The IRS states that companies must send Form 1099-MISC to their payees by January 31st – or February 15th of the document includes info in boxes 8 or 10. The IRS must receive this form by February 28th (if filed on paper) or March 31st (if filed electronically).
Both the payee and the IRS must receive Form 1099-NEC by January 31st.
Organizations that miss these deadlines can receive fines of up to $270 per 1099.
Your Trusted Business Attorney in San Diego
Do you have more questions about your duties and responsibilities during tax season? If so, you should speak to a knowledgeable California business lawyer. Fortunately, you won’t have to look very hard to find one. The Semanchik Law Group team has been assisting local businesses with tax and compliance issues for years, and we are ready to use our expertise to advise you.
To talk to one of our team members, all you need to do is send us a message online or give us a call at (619) 535-1811. We look forward to assisting you!
