What is a 1099 Form Used for? Untangling Forms 1099

What is a 1099 Form Used for? Untangling Forms 1099

As the new year begins, businesses and individuals are working through numerous deadlines, including the less-than-favorite form 1099 filings. We answer all your questions here about filing your 1099s.

What is Form 1099?

Form 1099 is an information return that is required to be filed with the IRS under certain circumstances. Form 1099-NEC (for non-employee compensation) and Form 1099-MISC (for certain miscellaneous income) are two common forms 1099 that businesses file with the IRS. There are several other types of 1099s that may be required to be filed. These information returns report to the IRS transactions that may need to be reported as income by the recipient of the 1099.

Do you need to file Form 1099?

Knowing what a 1099 form is used for can help you decide if you need to file one. Are you a business or individual who, as part of your trade or business, paid for services or rent of real property during the calendar year? Then, you may need to file a 1099 with the IRS and issue a copy to the recipient. Other circumstances also require a 1099 to be filed; check out this article to learn more information on who should be issued a 1099.

If you used a bank account (check, ACH, debit card, etc.) or cash or a form of cash to pay for services or rent, and you paid the recipient $600 or more in the calendar year, then you generally will be required to file a 1099. Generally, you do not need to issue a 1099 for services paid to a corporation, but a 1099 is required if your payments were made to a partnership, an individual, a sole-proprietor, or an attorney. These are very general guidelines, so please visit the IRS website for more information.

What is the deadline to file the 1099?

The deadlines for filing the forms 1099 vary depending on which type of 1099 is filed.

JANUARY 31: The deadline for filing forms 1099-NEC is January 31st (for filing either on paper or electronically)

FEBRUARY 28: The deadline for filing forms 1099-MISC on paper with the IRS is February 28th (March 31st if filing electronically). However, you are still required to furnish a copy to the recipient of the 1099 by January 31st.

How to File

Many accounting software programs have a 1099 filing feature. We encourage you to check with your software provider to find if your accounting software has 1099 filing abilities. There are several programs available online that you can use to file your 1099s, including the IRS free e-filing program here.

As of January 1, 2024, the IRS requires 1099s to be filed electronically if you file 10 or more 1099s.

1099s can also be filed on paper if you are filing less than 10 forms 1099. You can order free paper forms 1099 from the IRS website.

Written by: Charlotte Price