There are many types of 1099 forms that get reported every year. However, today I will talk about the 1099-MISC.

Many individuals out there ask, “What is the difference from a W-2 and a 1099?”, “Am I required to file them?”, “How do I issue 1099’s?”

What is a 1099-MISC?
A 1099-MISC form is used to report payments to contractors and advisers. These are generally issued only when there were payments paid over $600. However, some individuals may request one be issued even if they received less than $600 in payments.

Is a 1099-MISC the same as a W-2 form?
A 1099 is not the same as a W-2. The differences are that on a W-2 form the employer reports wages, Federal and State withholdings, Social Security and Medicare wages withheld, dependent care benefits, etc., for the employee. On a 1099-MISC only the total gross wages over $600 paid are reported.

Due Dates and Penalties
The deadline for employers to provide taxpayers with their 1099s is January 31st.

The deadline to file government copies for tax year 2016 is February 29, 2017.

If the government copies are not submitted by their due dates, there are penalties incurred.
• $50 per return by March 30
• $100 per return if filed after March 30 but before August 1.
• $260 per return if filed after August 1.

What type of payments are reported on a 1099-MISC?
There are 19 numbered boxes on this form and the amount paid must be reported on the box that the payment corresponds to. The following is a list of the most common reported payments:
• Rental Income (Box 1) – amounts received of $600 or more which carry over to Schedule E.
• Royalties (Box 2) – report only when more than $10 was paid. Total will be reported on Schedule E.
• Medical & Health Care Payments (Box 6) – income received that will be reported on Schedule C.
• Non-Employee Compensation (Box 7) – income received as an independent contractor. Amounts received will carry over to Schedule C.
• Substitute Payment in Lieu of Dividends or Interest (Box 8) – payments from broker lending out stock owned by you to short-sellers. Amount will carry over to Form 1040 line 21.
• Gross Proceeds Paid to an Attorney (Box 14) – Payments of $600 or more paid to an attorney for legal services or for a settlement.

To view a 1099-Misc form and download instructions on how to file you can go to https://www.irs.gov/forms-pubs

Judy

 

 

 

 

 

 

 

 

Judy Kaiser, Staff Accountant
JudyK@Godeckeclark.com