Who Must Receive a 1099 MISC?

Many businesses need to prepare 1099-MISC each January.
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A 1099-MISC form comes from the Internal Revenue Service (IRS) and lists income that is not related to wages. (Wage income is reported on the W-2.) The IRS uses this form to determine whether taxes are owed. Workers who receive 1099-MISC income normally must mail tax payments quarterly to the IRS.

Royalties or Rent

Anyone paid royalties of more than $10 in a calendar year requires this form. Businesses who pay rent to an individual or unincorporated entity are required to complete a 1099-MISC.

Minimum Threshold

If a person receives more than $600 in a calendar year and is not an employee of the company, he must be issued this form.

Private Contractors

Examples of private contractors who must get this form include actors, guest speakers, consultants, attorneys, accountants, repairmen, landscapers and snowplowers.

Prizes

Anyone who wins a prize over the threshold requires this form. If the prize isn't cash, its fair market value is listed as income.

Taxes required

State and federal taxes aren't normally withheld from income derived under this form. However, taxes are still owed. If a person doesn't receive a 1099-MISC form because their income is under the threshold, they still need to report the income on their tax return and pay taxes on that income.

Date Due and Mailing

A copy of the 1099-MISC must be mailed to the recipient before January 31 of each year. The original is sent to the IRS along with Form 1096. Your state department of revenue may also require a copy.

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