1099-MISC Form: What It Is and What It’s Used For

What is a 1099-MISC form?

A 1099-MISC form is a tax form used in United States to report miscellaneous incomes received by the individual to the Income Revenue Services (IRS). This is different from W-2 form here the term “1099” refers to series of form that the ORS used to report various type of income while “MISC” stands for miscellaneous.

Types of income reported on a 1099-MISC form:

Some common types of income reported on a 1099-MISC form include:

• Non-employee compensation: this include payment made to contractors, freelancers, and self-employed individuals for services rendered.
• Rent Payments: Amount paid for rental of property like office space, furniture or equipment.
• Royalties: Payments made for the use of intellectual properties such as patents, copyright and trademarks.
• Prizes and awards: Monetary rewards received such as contest winning etc.
• Other Income: any other miscellaneous income not fitting the above categories such as fishing boats proceeds, crop insurance proceeds, payment to attorney etc.

Who Files Form 1099-MISC: Miscellaneous Income?

Form 1099-MISC is filled by businesses, organization, and individuals who make payments such as royalties or broker payment during the tax year. Some common entities whole file 1099-MISC form are:

• Business: Any business that pays $600 or more in non-employee compensation, rents, awards, prizes and royalties to an individual or 1other business during the tax year are required to fill 1099-MISC form for each recipients.
• Self Employed Individuals: Individuals who pay $600 or more to sub contractors or freelancers must issue a 1099-MISC form for each recipients.
• Landlords: Landlords who receive more than $600 or more during the year need to report this income to the IRS and provide a 1099-MISC form to each tenant.
• Fishing Boat Operators: Operators who pay more than $600 to their crew members are also eligible to file form 1099-MISC form.
• Healthcare Providers: Healthcare providers who receive payment of $600 or more in the course of their trade or business must need to file this income in 1099-MISC form.
• Attorney: Attorney are also eligible to file 1099-MISC form.
• Financial Institutions: Financial institutions are also required to file 1099-MISC form for payments such as: interest income, dividends, broker payment in lieu of dividends or tax-exempt interest.

How to fill out a 1099 MISC form?

Here’s a general guideline to fill out a 1099-MISC Form:

• Gather Information: Collect all information including name, address, Tax Payer Identification Number (TIN) and the recipients information (name, address, TIN)
• Obtain 1099 MISC Form: You can obtain a 1099-MISC form from the IRS website, stationary stores or tax preparation software.
•  Enter Payer Information: In the Box 1 businesses have to enter their name and address as the payer. You need to enter the TIN, Employer Identification Number (EIN) or Social Security Number (SSN) in Box 7.
• Enter Recipients Information: In Box 2 you need to fill the recipients name, In Box 3, enter the recipients address and enter the recipients TIN in Box 4.
• Report Incomes: Depending on the income you need to fill the appropriate information in the following box:
  – Box 1: Non Employee Compensation such as payment to independent contractors or freelancer
  – Box 2: Rent
  – Box 3: Other income such as prizes, awards, royalties and other miscellaneous income.
• Enter Additional Information: If applicable you need to enter any tax withheld in B0x 16. Also, if you are reporting direct sales of $5000 or more of consumer products to a buyer for resale anywhere other than a permanent retail establishment, you may need to fill the box 9 in the IRS form.
• Fill out Copies: 1099-MISC form has multiple copies. you may need to fill:
  – Copy 1 goes to the recipient’s state tax department
  – Copy B is sent to the recipient
  – Copy 2 is sent to the recipient for their state tax return
  – Copy C is retained by the payer for record keeping
• Submit to IRS: if you are filling the form on paper, mail the copy A of the 1099-MISC form to the IRS along with Form 1096 which summarizes all the 1099 forms being submitted. if you filling electronically then you can follow the IRS e-filling instruction.

Where can I get 1099-MISC forms?

There are several options for obtaining Form 1099-MISC:

• IRS Website: You can directly download the form from the IRS website. Visit the IRS forms and Publication page and search for  “1099-MISC”
• Office Supply Store: Many office supply stores such as staples, office depot, FedEx office provide tax forms including 1099-MISC forms.
• Tax Preparation software: some online software typically fill out the necessary forms for you to fill out electronically. This software guides and help to fill and distribute to the respective parties.
• Tax Professional: if you work with and account ant or tax professional they can provide you with Form 1099-MISC and also assist you in filling the form.
• Local IRS Office: you can also get the 1099-MISC form from your local IRS office but do call ahead to get a confirmation of their availability and office hours.
• Online Vendors: you can also purchase these form online through online vendors or tax supplies companies. They offer both pre-printed forms and software- compatible versions.

Can you download 1099 -MISC forms?

Yes, you can download Form 1099-MISC directly from the IRS website. You can visit the IRS website go to ” Forms & Instructions Section” and search for 1099-MISC forms navigate through the list of all the form and click on download then you’ll be redirected to a pdf and you can hit download.

Can I print out 1099-MISC forms?

Yes, you can print out Form 1099-MISC. Once you have downloaded the form from the IRS website or obtained it from another source, you can print it out on standard letter-sized paper using a printer. Ensure the paper size is set to letter (8.5 X 11 Inches) and the orientation is set to portrait.

What is the deadline to file 1099-MISC form?

• To the Payee you need to provide the form by January 31st with all the details filled.
• To the IRS the due date for filing the IRS is February 28th and Match 31st if done electronically.