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a�?Basica�? Form 1099 Rules

Businesses that use outside contractors are required to submit information annually to the Internal Revenue Service regarding certain types of financial transaction arrangements.

Internal Revenue Service a�� Form 1096
Federal 1099 summary transmittal

1099-MISC

  • Box 7 a�� Nonemployee Comp
    For services provided that exceed $600
  • Box 1 a�� Rents
    For rents and not deposits actually paid to landlord
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  • Box 3 a�� Other Income
    Contact CPA before reporting amount in this box

1099-INT

  • Box 1 a�� Interest Income
    For debt instruments owed to individuals, trusts or closely-held businesses (e.g., owner loans, seller financed notes, etc.)

1099-DIV

  • Box 1 a�� Dividends
    For distributions to C Corporation shareholders of corporate earnings. Not for S Corporation distributions.

1099s are due to recipients by January 31st while they are required to be submitted to government agencies no later than February 28th.

Contractor file requirements:

Suggestion a�� To avoid the cost of resubmitting, wait to file 1099s with government agencies toward the end of February after your recipients have had a chance to review their own 1099 so changes can be made easily rather than outright amending.

Critical Concept a�� If youa��ve converted your sole proprietorship to a profit corporation or limited liability company submit an updated Form W-9 to reflect the new business name and EIN so 1099s issued to you in the future are properly processed.

Caveat – Please contact your legal, business and tax advisors to determine appropriate compliance with federal, state and local law and related filing requirements for your particular business.

Disclaimer – Advice, instruction and forms provided above are for illustrative purposes only and are offered as a public service without representation or warranty and is not intended or written to be used, and cannot be used, for the purposes of constructing unlawful acts under federal and state law or avoiding penalty under the internal revenue code.