RULE AND REGULATION REMINDERS IN TERMS OF THE ISSUANCE OF 1099'S FOR 2023
We want to remind you of the rules and regulations concerning the issuance of 1099’s for the 2023 calendar year.
Your responsibility as a business owner is to comply with these reporting requirements.
You should begin gathering the information needed to prepare Forms 1099-MISC & 1099-NEC (Non-Employee Compensation) for the 2023 tax year as soon as possible. Please review the payments you have made so far to your vendors during the year. If you need assistance gathering this information, don't hesitate to contact 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 and awards
Generally, the cash 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 basis 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 the following (refer to the Instructions for Forms 1099-MISC and 1099-NEC at irs.gov for additional exceptions):
Generally, payments to a corporation (including a limited liability company [LLC] that is treated as a C or S corporation) with a notable exception – for payments made to an attorney and medical and health care payments – 1099’s must still be issued for these types of payments
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/pub/irs-pdf/i1099mec.pdf
