• Denise Hue

1099-MISC Forms for Subcontractors

File 1099’s for payment made of at least $600 in:

  1. Rents.

  2. Services performed by someone who is not your employee.

  3. Prizes and awards.

  4. Other income payments.

  5. Medical and health care payments.

  6. Crop insurance proceeds.

  7. Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.

  8. Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.

  9. Payments to an attorney.

  10. Any fishing boat proceeds.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit.

Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). However, 1099’s are issued to corporations for the following reasons:

  1. Medical and health care payments reported in box 6.

  2. Gross proceeds paid to an attorney reported inbox 10.

  3. Substitute payments in lieu of dividends or tax-exempt interest reported in box 8.

There are penalties for filing incorrect 1099’s. Make sure you obtain a W-9 from contractors and others you have paid to ensure that their taxpayer identifying number and name is correctly reported.

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