|
Who can Issue 1099-MISCs A 1099-MISC needs to be issued by your trade or business under many situations when you pay someone for rent, services, royalties or other various fees. See your tax professional for more information.
Steps Step One Determine if you have a trade or business. If you are operating for the purpose of making a gain or profit, you have a trade or business.
Step Two Determine if you run a nonprofit organization, a taxable farmers cooperative, a government agency, or a trust of a qualified pension or profit-sharing employer plan. These are considered trades or businesses for 1099-MISC purposes.
Step Three Calculate if you paid $600 or more during the tax year in the course of your trade or business to an individual or partnership. Professional fees to an attorney, doctor or other professional are included. Payments to corporations are included only if they are for medical, health care, legal or fishing activities.
Step Four Calculate if you paid $10 or more in royalties.
Step Five Issue 1099-MISCs if you have or manage a trade or business and have paid $600 or more to an individual or partnership (or certain corporations) or have paid $10 or more in royalties.
Step Six Issue a separate 1099-MISC to each individual or partnership (or specific corporation).
Tips
Do not send a 1099-MISC to someone when you have made a personal payment to him. An independent contractor to whom you have made a personal payment unrelated to your trade or business does not receive a 1099-MISC.
Do not send a 1099-MISC to an employee. That is what a W-2 is for.
An independent contractor receives a 1099-MISC only if you pay him in the course of your trade or business.
A household employee who is not an independent contractor should be issued a W-2 by the employer. The employer must also fill out a Schedule H.
|