What is IRS 1099 MISC Form?

Report all the Miscellaneous received from sources other than a wage paying job to the IRS through Form 1099-MISC. This form is used to report payments for services done by non-compensation employees, rents, royalities and other terms involved. It is that this form 1099-MISC is filed online as it saves your ample amount of time. For more than 250 form filing it is best that e-filing is done as advised by IRS.

Who needs to file IRS 1099 MISC Form?

File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest
  • At least $600 in rents, services (including parts and materials), prizes and awards, proceeds, other income payments, medical and health care payments, crop insurance cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish,or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
  • Any fishing boat proceeds; or Gross proceeds of $600 or more paid to an attorney.
irs 1099-misc form
e-file 1099-misc

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment. You must also file Form 1099-MISC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Report on IRS Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, non-profit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements.

Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d) , farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts. Payments by federal, state, or local government agencies are also reportable.

Who is a non-compensation employee?

The following are the scenarios where you report a payment as a non-compensation employee:

  • When you have made a payment to someone who is not your employee
  • When you have made a payment to an individual, partnership, estate or in some cases a corporation
  • When you have made payments to the payee of at least $600 during the year
  • When you have made payments for services in course of your trade or business (including government agencies and non-profit organizations)

You can report the non-compensation employee in the box 7 of the 1099-MISC form

1099-misc non compensation employee

When are the Deadlines for IRS Form 1099-MISC-2016 Tax Year?

employee icon

Deadlines to File Form 1099-MISC (Other than Non-Compensation)

  • Jan 31, 2017= Recipient Copy
  • Feb 28, 2017= Paper Filing Deadline
  • Mar 31,2017= E-filing Deadline
non compensation employee

Deadlines to File Form 1099-MISC (Non-Compensation Employee)

  • Jan 31, 2017= Recipient Copy
  • Feb 28, 2017= Paper Filing Deadline
  • Mar 31,2017= E-filing Deadline

How to Your file IRS 1099-MISC?

paper filing 1099-misc Paper Filing

If you file through paper, for non-compensation employee the due date is on January 31,2017 otherwise it is February 28, 2017. This means that Copy A of this form is to reported to the IRS on the respective dates mentioned above.

e-file 1099-misc online Electronic-Filing or E-Filing

If you file electronically, the due date is on January 31, 2017 in case of non-compensation employee otherwise it is March 31,2017. To file electronically, you must have software that generates a file according to the specifications in Pub. 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935 and Form W-2. The IRS does not provide a fill-in form.

Penalties For Late Filing a 1099 MISC Form

It is important to file your 1099 on time to avoid incurring penalties. The E-File deadline is March 31, 2017. If you are reporting for non-compensation employee then it is January 31,2017. According to the General Instructions for Certain Information Returns the penalty applies

  • If you fail to file timely,
  • If you fail to include all information required to be shown on a return, or you include incorrect information on a return. The penalty also applies if you file on paper when you were required to file electronically,
  • You report an incorrect TIN or fail to report a TIN,
  • You fail to file paper forms that are machine readable.

Exceptions in not reporting payments for IRS Form 1099-MISC

It is important to file your 1099 on time to avoid incurring penalties. The E-File deadline is March 31, 2017. If you are reporting for non-compensation employee then it is January 31,2017. According to the General Instructions for Certain Information Returns the penalty applies

  • Payments to a corporation.
  • Payments for merchandise, telegrams, telephone, freight, storage, and similar items.
  • Business travel allowances.
  • Cost of current life insurance protection.
  • Wages paid to employees.
  • Military differential wage payments made to employees.
  • Payments made to or for homeowners from the HFA.
  • Payments to a tax-exempt organization including tax-exempt trusts.

Form 1099-MISC Filing Instructions