What Are the Rules for 1099 Reporting in 2015?


Quick Answer

As of July 2015, businesses, including self-employed individuals, who make payments to independent contractors as a part of their trade are generally required to file Form 1099-MISC, according to the Internal Revenue Service. Exemptions include payments made to corporations or payments that total less than $600 to the same recipient in one year.

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Full Answer

Payments made to individuals, partnerships, limited liability companies, limited partnerships and estates must all be reported through Form 1099 if they meet the minimum threshold, explains the IRS. Businesses must provide Form 1099 directly to their payees by January 31, according to TurboTax.

Examples of independent contractors include freelance writers, consultants and artists. Businesses must also provide lawyers, including those that have incorporated, with Form 1099, notes Entrepreneur. Certain types of payments, including those made to real estate agents, merchandise vendors, and freight and storage providers are exempt. Businesses that hire non-U.S. citizens to perform work outside the United States are still required to submit the form, with penalties ranging from $30 to $100 for each form not completed.

Other types of Form 1099 include 1099-DIV for corporate dividends and 1099-INT for interest payments, explains TurboTax. The federal and state governments provide taxpayers with Form 1099-G for unemployment compensation and state income tax refunds, while financial institutions provide individuals with Form 1099-R for any retirement account withdrawals. The minimum amounts for each form vary from any amount to $100 million, with the IRS requiring almost all to be delivered by January 31, according to eFile.com.

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