Tax Forms can differ from year to year based on the IRS rules & regulations. Typically, we know these happen, & can plan to stay forward against IRS Tax compliance. For successful filing know Form 1099 MISC updates regularly.
Here are the changes made in IRS Form 1099 MISC. Check them out before you start filing a 1099 information return. So, that you can avoid unnecessary penalties & interests. However, it also helps you in reducing Form 1099 rejection risks.
What are the new 1099 MISC Updates rules?
Beginning with the tax year 2022, the IRS has updated Form 1099 MISC boxes. Here are the major change made in 2021:
Rule 1- Form 1099 MISC Box 11
In the prior year, MISC Box 11 was reserved. But in 2021, the IRS has revised it & made it available to report fish purchases for resale. In the tax year 2020, when Form 1099 NEC was revived back, the IRS considered fish purchase for resale as NEC. So, the taxpayers who purchased fish from the person who is involved in the business of catching fish reported the payments made in the “1099 NEC Tax Form”. Therefore, use box 11 of 1099 MISC to report “Fish Purchase for Resale”.
1099 MISC Additional Changes
In the tax period 2020, the IRS instructed every business owner to report direct sales of consumer products for resale. This means the taxpayer who made direct sales of $5,000 or more consumer products on resale must report the payments in box 7. From 2022, the taxpayers can use 1099 NEC box 2 or 1099 MISC box 7 to report direct sales. 1099 NEC box 2 reserved in the prior year. And, now added back to report the direct sales. So, those who report direct sales using 1099 NEC box 2 must make sure regarding the deadlines. Because Form 1099 NEC & 1099 MISC filing due dates are different.
Did the IRS change the Form 1099 MISC title?
Yes, the IRS has also changed the title of Form 1099 MISC in 2021. Previously, the 1099 MISC Form was familiarly known as the “Miscellaneous Income Tax Form”. But from now known as “Miscellaneous Information Tax Form”. Yes, along with the changes in reporting rules the IRS made a change in the title.
Do the changes influence the reporting threshold of 1099 MISC Return?
No, the changes don’t influence the reporting threshold of the tax form. The reporting threshold had remained the same for the tax year 2022-23. Here are the details of the IRS Form 1099 MISC reporting threshold:
$600 or more – For rents, prizes or awards, crop insurance proceeds, fishing boat proceeds, and many more.
$10 or more – royalties.
$5,000 or more – Direct sales.
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