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Form 1099 - MISC: When Do You Need to File?

BY Larry Gebhard, CPA
08/13/2014 - 12:21pm

Organizations are required to file Form 1099-MISC for each vendor (including Sole Proprietor, LLC, Partnership and independent contractor) who was paid at least $600 in rents, services, prizes or awards in the calendar year.  In addition, for payments made to an attorney (law firm or other provider of legal services) for $600 or more, regardless of the type of business entity (Sole Proprietor, LLC, Partnership, or Corporation), the organization is required to file Form 1099-MISC.

The easiest way to obtain the information needed to file a Form 1099-MISC is to request the Form W-9 from any vendor you believe will trigger the filing requirement. The Form W-9 is the Request for Taxpayer Identification Number and Certification.  It is best to request this form before payment is made, instead of waiting until the end of the year. It will save you a lot of headaches!  Once you have obtained a Form W-9 from the vendor working for you, you can use it year after year to complete the Form 1099-MISC. 


The Form 1099-MISC is due to the vendor by January 31 and due to the IRS by February 28 (March 31 for those who file electronically).  Along with all the Forms 1099-MISC sent to the IRS, you must send Form 1096, which is the Annual Summary and Transmittal of U.S. Information Returns.  It simply summarizes some of the information contained in the Forms 1099-MISC.  It is recommended not to send the Forms 1099-MISC and 1096 to the IRS until the end of February.  This is helpful just in case there is a mistake made on one of the Forms 1099-MISC that needs to be corrected.  This will allow you to send a corrected Form 1099-MISC to the recipient without having to send a corrected Form 1099-MISC and 1096 to the IRS.

Your organization may be assessed a penalty by the IRS if you fail to file, file late, or file using incorrect information.  The penalty ranges from $15 to $50 per Form 1099-MISC, depending on how late it is filed.  While the penalty may not seem like much, it can add up quickly if you have more than a few forms to file.

If you have any questions or need assistance with the preparation and filing of the Forms 1099-MISC and 1096, please contact us.