1099 Services and 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:

1099 Engagement Letter
Data Input Sheet

Please send in all 1099 information to our office no later than January 15, 2021, so we have enough time to process them before the deadline.

WHAT’S NEW THIS YEAR

As you may have heard, the biggest change to 1099 filing this year is that box 7 (for nonemployee compensation) has been moved from the 1099-MISC to the new Form 1099-NEC. Don’t worry; this won’t change much for you aside from the form you use to report these payments, as well as possible new state reporting requirements.

However, many of your payees likely received a Form 1099-MISC from you in past years and may notice a change with the Form 1099-NEC this year. It may be a good idea to give a heads-up to any of these payees ahead of time in order to avoid confusion.

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.

OTHER 1099 REPORTING

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.

GET FORM W-9 FROM VENDORS

One of the best business practices you can implement is to request a W-9 from any vendor you expect to pay more than $600 annually before you pay them. This will provide you with the vendor’s legal name, mailing address, tax ID number and the vendor’s tax classification. You can download a W-9 form here: http://www.irs.gov/pub/irs-pdf/fw9.pdf

DUE DATES

This year, Form 1099-NEC must be filed by January 31, 2021. Form 1099-MISC must be filed by March 31, 2021, if e-filed. However, it’s never a bad idea to get all your 2020 payments together early and file both forms (if needed) in January!

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: Data Input Sheet 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 few days.