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Who should file Form 1099-Misc

Updated: May 13, 2020

Generally, You must file Form 1099-MISC, Miscellaneous Income, for each person to whom the you have paid in the course of the payer's trade or business during the year:

_Over $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) purchased.

_For each person from whom a taxpayer has withheld any federal income tax under the backup withholding rules, regardless of the amount of the payment.

Example of the types of independent contractors you must report the amount paid include:

_Professional service fees, such as fees to attorneys (including corporations), accountants, architects, contractors, subcontractors, etc.;

_Fee-splitting or referral fees

_commissions paid

_Director's fee

income taxes

Notable Exception:

_Personal payments are not reportable.

_No 1099-Misc is needed if you paid them via PayPal or credit card.

_Payments to a corporation are not reportable, except medical and health care payments and attonerys and a few other exceptions.

_Payments for merchandise, telegrams, telephone, freight, storage, and similar items

_Payments of rent to real estate agents

_wages paid to employees

For calendar years after 2015, the deadline for filing paper Forms 1099-MISC is January 31 of the year following the calendar year for which the filing is made.

For more information, please see IRS website.

Frequently Asked Question: what if my subcontractor is a foreigner outside of US?

If the service is provided by a non-US person and the service is provided outside of US, No 1099-misc is required. However, I would recommend you ask them to fill out Form W-8BEN. Form W-8BEN is to certify the person is not a US person and you should keep the W-8BEN on file.

If you would like to make an appointment to discuss more, please give this office a call at 415-704-8989 or email me at Book a meeting online.

More articles about tax, accounting, and business.

Circular 230:The articles are for general information only. In accordance with IRS Circular 230 they are not considered tax opinions for purposes of relying on such statements in any challenge of the reporting of the above transaction by the IRS. If a full tax opinion is required certain procedures must be met . Also there is a significant cost for a full tax opinion to meet the requirements of Circular 230.

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