IRS Rules for 1099 Filers

by Kristen May

The IRS gathers several types of informational returns to ensure that individuals and businesses are reporting their income from all sources. Several of these informational returns are variations of Form 1099. Businesses that issue payments of several types to individuals or other businesses must file these 1099 forms in compliance with the IRS rules.

Types of 1099 Forms

The different 1099 forms are denoted by a suffix indicating what type of income gets reported on the form. Form 1099-MISC forms are for reporting miscellaneous income to landlords, service providers or recipients of royalties. Form 1099-INT allow banks to report the interest customers earned on their deposits. Form 1099-DIV is for companies that manage investments, including stocks and mutual funds, to report dividends and capital gain distributions. Form 1099-B lists proceeds individuals earned from selling stocks, bonds and other securities. Form 1099-C reports cancelled debts on which income tax may be due. Other types of 1099 forms include 1099-A, 1099-CAP, 1099-G, 1099-H, 1099-K, 1099-LTC, 1099-OID, 1099-PATR, 1099-Q, 1099-R, 1099-S and 1099-SA.

Information Required

Businesses preparing Form 1099 must include several key pieces of information. The form must list the name and mailing address of the recipient, whether an individual or a company. If the recipient is an individual, the form also must list the person's Social Security number. If the recipient is a business, the form must list the employer identification number. These ensure the form gets matched with the correct person or business. Gather this information by having the person or business fill out Form W-9. The person or business filling out Form 1099 also needs to fill out a section with his name, mailing address and employer identification number. The other information that goes on Form 1099 varies depending on which form it is, but in general, the filer must report all money paid to the individual or business during the previous calendar year.

Filing Deadline

The person or business filing Form 1099 must provide it to both the IRS and the recipient of the funds who is named on the form. All variations of Form 1099 must be submitted to the IRS by February 28, or by March 31 when filed electronically. Most types of 1099s must be provided to the recipient named on the form by January 31. The exceptions to this are the 1099-B, 1099-S, and 1099-MISC for substitute dividends, tax-exempt interest payments or payments to attorneys, which have a deadline of February 15. In addition, trustees and middlemen of widely held fixed investment trusts have until March 15 to report income to recipients on most types of 1099s.

1099-MISC Rules

The most common 1099 form that individuals have to file is 1099-MISC, which small-business owners often issue. This form shows money the small business paid to individuals or other businesses in the course of ordinary business. If you paid at least $600 in rent to someone other than a real estate agent, you must report this on Form 1099-MISC and provide it to the individual or company you rent from. You also must report healthcare payments of $600 or more, including those for health insurance, to the IRS and the company you paid. If you paid $600 or more to an attorney for legal services, report this on a 1099-MISC to the attorney and the IRS. You also need to report payments of $600 or more to independent contractors who provided services at your business. These are individuals who are not your employees and who do not receive a W-2 from you, so you must report payments on Form 1099-MISC instead.

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