Form 1099 Reporting for Small Business Owners Now Due by January 31

As a small business owner you must issue a Form 1099-MISC to each person to whom you have paid at least $600 in rents, services (including parts and materials), prizes and awards, or other income payments. You don’t need to issue 1099s for payment made for personal purposes. You are required to issue 1099-MISC reports only for payments you made in the course of your trade or business.

Who are you required to send a Form 1099?  
Again, for total payments of at least $600, paid to vendors or sub-contractors during the normal course of business, you are required to send Form 1099 to any individual, partnership, LLC, Limited Partnership (LP), or Estate.

Who are considered Vendors or Sub-Contractors?
This is a person or company you have paid for services that isn’t your employee.

What are the exceptions?
The most common is that you don’t need to send a 1099 to:

• Vendors operating as S or C-Corporations.
• Payments made by credit card or third-party payment networks.  Merchant companies report these payments to contractors on a Form 1099-K.
• Real estate landlords, unless they operate as “real estate professionals” as defined in the tax code.

When are 1099s due?
Congress recently moved up the filing date to fight identity theft. Starting in 2016, Forms 1099 should be issued to payees and sent to the tax authorities by January 31.

If you are unsure whether you have a Form 1099 filing obligation or suspect you may have one, please contact me prior to January 20 so that we could determine whether you have made any payments that would subject you to a Form 1099 filing requirement for payments you made in a course of your business and to assist you with preparation of Forms 1099.