What is a 1099?
A Form 1099-MISC is used to report income paid to independent contractors. It tells the IRS how much you paid to a contractor for services during the year.
When are 1099s due?
January 31st. This means they must be filed with the IRS and delivered (at least postmarked) to the recipients by that date.
Who do I send 1099s to?
Unincorporated vendors paid $600+ for services using cash, check, bank transfer, or debit card. You do not need to send one to those who are Corporations or S-Corporations. How do you know? Ask them for a W9. That will let you know their business’s status so you know whether or not they should receive one.
What if I paid them using PayPal or credit cards?
You don’t need to do anything! Those companies will send a 1099-K for you. If you use the Friends and Family option in PayPal you will need to issue a 1099-MISC. Note: using Friends and Family to pay independent contractors violates PayPal’s terms of service and can restful in your account being frozen or closed.
What is the easiest way to file my 1099s?
Hire a bookkeeper! I have a few openings for 1099 clients if you need help.
What if I didn’t file a 1099 for someone that I should have?
File as soon as possible. You may be required to pay a fee depending on how lat you file.