Rule and Regulation Reminders In Terms of the Issuance of 1099's in 2022

We want to remind you of the rules and regulations concerning the issuance of 1099’s for the 2022 calendar year. It is your responsibility as a business owner to comply with these reporting requirements.

It would be best if you began gathering the information needed to prepare Forms 1099-MISC & 1099-NEC (Non-Employee Compensation) for the 2022 tax year as soon as possible. Please review the payments you have made to your vendors during the year. If you need assistance in gathering this information, please get in touch with our office.

Have you paid a single vendor a total of at least $600 during the year for any of the following?

Use Form 1099-Misc for:

  •         Rents

  •         Prizes or awards

  •         Generally, the cash is paid from a notional principal contract to an individual, partnership, or estate.

  •         Any fishing boat proceeds

  •         Medical and health care payments

  •         Crop insurance proceeds

  •         Gross proceeds paid to an attorney (for example, a settlement agreement)

  •         Nonqualified deferred compensation

  •         In addition, use this form or Form 1099-NEC, to report that you made direct sales totaling $5,000 or more of consumer products to a person on a buy-sell, a deposit-commission, or other commission bases for resale

Use Form 1099-NEC for:

  •          Services performed by someone who is not your employee (including parts & materials)

  •          Payments to an attorney

Exceptions to these requirements are as follows:

Payments for which a Form 1099-MISC or Form 1099-NEC is not required include all of the following:

·         Generally, payments to a corporation (including a limited liability company [LLC] that is treated as  a C or S corporation) except for payments made to an attorney, for fish purchases, and medical and health care payments  – 1099’s must still be issued for these types of payments

  •          Payments for merchandise, telegrams, telephone, freight, storage, and similar items

  •         Payments made with a credit card or payment card

 

If you have made payments, you believe may require a Form 1099 to be issued, and you do not have the EIN for this vendor on file, please send a Form W-9 to the vendor and ask them to complete the form and return it to you as soon as possible.

For more specific information, please refer to the website: https://www.irs.gov/instructions/i1099msc         

Business Owners, Community, From The Doty Group, Individuals, IndustriesAidan HeltThe Doty Group P.S.Tacoma CPA, 1099, 1099-NEC, 1099-Misc, Form 1099, Updates, IRS Updates