A 1099-MISC is a type of tax form. It is used to report miscellaneous income, such as income earned as a non-employee including fees, commissions, rents, or even royalties paid during the last tax year. Payments for prizes, awards, legal services, and other non-employee activities may be reported on this form as well.
If an entity reaches a threshold of $600.00 US Dollars or more paid in a calendar year as a non-employee, it is legally required to report to the Internal Revenue Service using a 1099-MISC form. As the payee, you will receive your own copy of the form. Once received, check carefully for errors and keep the form in a safe place. It will be required when reporting this income on your tax return.
Any business that has paid you $600 USD or more as a non-employee, or at least $10 USD in royalties must provide you with a 1099-MISC form by January 31st of the year following payment. If you are expecting a 1099-MISC and have not received it by January 31st, contact the organization that pays you and request a copy. You may also contact the IRS to request a copy.
This is a critical component of the year end closing process. Direct any questions to your CPA or local advisor, like TGG Accounting, for answers. We can implement a very simple process to make this an easy task at year end.Written by: Adriat Markos TGG Accounting