When You Need To File a 1099 For a Vendor Or Contractor

recite-1099s

I regularly get questions about whether or not to file 1099s.  They are often surprised that more vendors and contractors need 1099s than they think. The list goes well beyond a freelancer you hire or a subcontractor you use.

In general, 1099s are required for payments over $600 made to individuals and partnerships – NOT corporations. The following is a list of common vendors you will need to issue 1099s for:

  • Payments for services
  • Payments for rent to landlords
  • Payments for prizes and awards
  • Payments to attorneys

The biggest exception to the general rules above is that a 1099 needs to be filed for attorneys and legal services even if they are a corporation.

Not sure if you should file a 1099? My theory is- if in doubt, file it. There is no problem if you file a 1099 you did not need to file. However, the IRS can hit you for up to $100 per 1099 you do not file if you needed to.   Even worse, the IRS can disallow the corresponding deduction on your income tax return.

Tweet it! Payments over $600 for services, rent, and legal fees require 1099s. bit.ly/1kt4NSu @BetteHochberger 

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