1099 Filing Requirements

If you would like us to prepare your 1099s, please contact Melissa at melissa@fkco.com. You can find our 1099 engagement letter and 1099 data input sheet below:

Please send in all 1099 information to our office no later than January 12, 2024, so we have enough time to process them before the deadline.

Who gets a 1099-NEC?

As in past years, you should report a payment as nonemployee compensation (on Form 1099-NEC) if:

  • The payment was made to someone who is not your employee.
  • The payment was made for services in the course of your trade or business.
  • The payment was made to an individual, partnership, estate, or (sometimes) a corporation.
  • The payments to the payee totaled at least $600 during the year.
Who gets a 1099-MISC?

Although a lot of payments are for nonemployee compensation, there are still a few other special payments that need to be reported on Form 1099-MISC. These include:

  • Box 1 for rents paid (at least $600) for real estate, office space or machine rentals, except if they’re paid to a real estate agent or property manager.
  • Box 2 for royalties (at least $10) stemming from the use of intangible property such as patents, copyrights, trade names and trademarks.
  • Box 10 for gross proceeds paid to an attorney (at least $600) in connection with legal services, such as a settlement payment. (Note – Payments to attorneys for legal services are considered nonemployee compensation payments.)

As a reminder, corporations generally don’t need 1099s issued to them, with the exception of attorneys. While the above payments are the more commonly used boxes on the 1099-MISC form, there may be others that also need to be reported, such as a 1099-INT for interest payments made. Let us know if you have any questions on the tax reporting for any kind of payment.

Merchant Card Transactions

You don’t need to issue 1099s for any transactions that you paid by credit card. As for Venmo, PayPal and Cash App, you’ll need to issue 1099s for only the amounts your business paid to personal accounts on these apps for services. If you paid a business account or you marked the transaction as a business transaction, you don’t need to include these amounts.

NEW for 2023! IRIS E-filing Portal

Starting with the 2023 tax year, 1099 filers are required to electronically file if issuing 10 or more forms. This change comes with the introduction of a new 1099 e-filing portal by the IRS, called the IRIS. You can read more about this new portal here. You’ll need an EIN and a TCC number if you want to register and file using the IRIS portal. (If you use FKCO’s 1099 preparation services, no need to worry about the IRIS portal – we take care of the e-filing for you!)

Collect Those W-9’s!

We know how long our to-do lists can get as we prepare for the year-end – which is why it’s so important to collect W-9 forms from your payees throughout the year before any payment is made to them. If you haven’t implemented that best practice, make it a new year’s resolution to do so! Take a few minutes this month to review the W-9s you have on file, and make sure you have one for each of your payees that get paid over $600 during the year.

You can download a W-9 form here. This will provide you with the vendor’s legal name, mailing address, tax ID number and the vendor’s tax classification.

Due Dates

This year, Form 1099-NEC must be filed by January 31, 2024. Form 1099-MISC must be furnished to recipients by January 31, 2024 and e-filed by April 1, 2024. However, best practice is to file and furnish both forms (if needed) by the end of January.

Note – Since the introduction of the new 1099-NEC Form a couple of years ago, you may have had to comply with separate state filing requirements in recent years. However, state guidance is always changing, so be sure to check with your states to see their updated requirements for this year.

Still need help?

FKCO is happy to help you by offering 1099 form preparation services.

If you would like us to prepare your 1099s, please contact our office or visit our website here for a blank 1099 data input sheet. If we prepared your 1099s last year, you will be receiving your personalized business email from us in the next couple of weeks.