Who is required to file a 1099? Ask the expert with Wegner CPAs

As the year end approaches it is important to start thinking about 1099 filing requirements for 2017. The basic rule is that you must file a 1099-MISC whenever you pay an unincorporated independent contractor who is a sole proprietor or member of a partnership or LLC, $600 or more in a year for services in the course of their trade or business, which includes rent. Any payments of $600 or more in a year made to an attorney will also require the filing of a 1099-MISC, regardless of the entity type. It is important to note that payments made by credit card are not included in this requirement.

The 1099-MISC is the most popular 1099 filing requirement for businesses. However, 1099s will also need to be filed to report non-service-orientated income, such as interest paid (1099-INT), dividends paid (1099-DIV), patronage dividends paid (1099-PATR), and mortgage interest received (1098), to name a few. The above listed forms have the following threshold requirements:

  • 1099-MISC: $600 or more, $10 or more for royalties
  • 1099-INT: $10 or more
  • 1099-DIV: $10 or more
  • 1099-PATR: $10 or more
  • 1098: $600 or more

Any 1099-MISC reporting nonemployee compensation must be filed by January 31, 2018, while all other 1099 forms are due electronically by April 2, 2018 (February 28, 2018 if paper filed). Failing to comply with the filing requirements by these deadlines may leave you liable for penalties due. These penalties range from $50-$260 per information return depending on the time of compliance. Due to the accelerated deadlines, it is important to provide your tax professional with all of the necessary information on a timely basis and begin compiling this information before year end.

Please consult your accountant or tax professional for a more extensive dive into Form 1099 filing requirements.

Bryce Smit, MPA, is an accountant at Wegner CPAs and provides tax planning & compliance services for individual and business clients.

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