End Your Year Like A Business Pro

Guide 2: Vendors & Tax Forms

Each January, tax forms need to be filed with the IRS and your local governments.

A few of these forms are your employee payroll tax forms, which your payroll service likely already does for you.

Technology is great, isn't it?

Another form you need to prepare is the 1099-MISC.

 

This form is used to report amounts to the IRS that were paid to a non-employee contractor. We’ll discuss who needs one of these forms shortly.

 

One thing to note again is the 1099-MISC form is not to report employee compensation. The 1099-MISC is for non-employees only.
 

What type of vendor gets this form?

Subcontractor, landlord, attorney, or other required vendors

 

When is this due?

1099-Misc forms need to be filed with the IRS and the contractor by January 31.

Where do you get the information to fill out the vendor 1099 form?

Vendors who are required to be sent a 1099-MISC are required to submit a W9 form to you. This is the form that will include all pertinent information about your vendor that you need to be able to fill out their 1099-MISC form. This information is their name, address, tax ID number.

 

IRS criteria:

1. Are United States residents
2. Were paid over $600.00 in rents, services, prizes or other payments

2a. The exception is attorneys - all gross receipts are reported, even if under $600.00

 

3. Were paid via cash, check, ACH, direct deposit (not credit or third party payment processor like Paypal)

3a. If paid via Paypal, credit card, or other third party, the third party merchant is responsible for sending the contractor a 1099-MISC form when the payments are over $20,000
 

4. Are not incorporated

 

A full list of the requirements are found on the 1099-MISC form instructions on the IRS website

 

Who Needs A Copy?

  • The IRS needs a copy

  • The contractor needs a copy

  • Your state government may require a copy. Check your local requirements.

 

How To File

 

  • Mail

  • E-Filing Service

  • Via your tax professional