As the new year approaches, we will soon find ourselves closing in on the 1099 filing deadline. If you made payments in the course of your trade or business during 2021, you may need to file 1099s to report those payments. The deadline for filing these forms is January 31, 2022.
The following amounts should be reported on Form 1099-MISC for each person whom you have paid during the year:
- At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest
- At least $600 in:
- Prizes and awards
- Other income payments
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate
- Any fishing boat proceeds
- Medical and health care payments
- Crop insurance proceeds
- Gross proceeds paid to an attorney
- Nonqualified deferred compensation
The following amounts should be reported on Form 1099-NEC for each person to whom you have paid during the year:
- At least $600 in:
- Services performed by someone who is not your employee (including parts and materials)
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
- Fees paid to an attorney
You must also file Form 1099-MISC and Form 1099-NEC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment. Additional information about 1099-MISC and 1099-NEC filing requirements and instructions can be found on the Internal Revenue Service website.
Form W-9 should be used to request the necessary information from businesses and individuals to which you have made payments that may be reportable on a 1099. This information includes their name as shown on their income tax return, federal tax classification, address, and social security number or employer identification number. It is best to collect this information throughout the year as payments are made to new vendors or individuals, so that you have it on hand at year end for any that will require a 1099 to be filed.
If you have any additional questions about filing 1099s, please reach out to your SDK advisor or Shelby Graham in our Accounting Services department.