Changes to Tax Law: Employers utilize the 1099 Misc form to pay independent contractors or freelancers. The 1099 MISC forms are only utilized while conducting business or engaging in trade. For reporting personal payments, they are not intended. Keep in mind that non-profit organizations are required to use this form because they are deemed to be “in business”. 2011 saw a modification to the way the 1099-MISC form was used. With this modification, there are new situations that call for the use of the form.
For each person or organization that you paid any of the following items to during the year, you must now submit a 1099 Miscellaneous Income form:
- a minimum of $10 in broker fees, royalties, or other payments in place of dividends or tax-free interest;
- a minimum of $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care costs, crop insurance proceeds, cash payments for fish (or other aquatic life) you buy from anyone involved in the trade or business of catching fish, or, generally speaking, the money received from a notional principal contract and paid to an individual, partnership, or estate;
- any fishing vessel moves forward; or
- A lawyer received gross earnings of at least $600.
The IRS.gov website is where the bullets above were taken from.
The IRS website lists a number of situations in which the 1099 MISC form is NOT necessary. Use caution and avoid using the MISC form when a different, more applicable 1099 form is required. Simply read the article titled, when to file a 1099 form, to see a list of these 1099 form variations (Click here: https://www.form1099online.com/1099-forms/).
You may find all of these forms on Form1099Online, where filing all of your tax documents all year long is simple and affordable.