Were you caught off guard when it was time to prepare 1099-MISC forms for your vendors? You should have a completed Form W-9 on file for all vendors that you do business with. A Form W-9 will give you the Federal ID number of the vendor, type of entity, and the correct company name and address. Keep copies of the W-9 forms in a file and ask new vendors to complete them.
1099-MISC forms are most commonly used to report miscellaneous income payments to non-employees (contractors). The IRS provides information to help you determine if someone is an independent contractor or an employee.
There should be a 1099-MISC filed for each person you paid as follows:
- Payments of $600 dollars or more to contract employees, independent contractors and/or consultants, physicians, physician’s corporation, or other providers of health or medical services, purchases of fish for resale, and crop insurance proceeds
- Payments of $10 or more for royalties, substitute dividends and tax exempt interest
- Payments of any amount to attorneys and crew-members of fishing boats
- Payments of any amount to persons subject to the backup withholding rules
- Sale of $5,000 or more of consumer products for resale anywhere other than a permanent retail establishmentIf you have questions about 1099s or need help preparing them, please give us a call at 616.393.0398.
- 1099 forms are due to contractors before January 31. While the time to file them has passed for this year, you should remember to get Form W-9s completed throughout the year to make next year-end a breeze.
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