What is a 1099 and who must send Form 1099 to others?
There are two cases:
- Businesses. You must report payments to others for services.
- “Nominee” amounts. If you are named as receiving income, but
part of the income belongs to another, you are a nominee. You must send Form 1099 to the other party by February 1. Copies are due at IRS by March 3.
Businesses If you paid $600 or more to a person or business during 2013 you may need to issue a form. Applies to “business” expense only. You don’t need to report payment for personal expenses or any payments made to a corporation.
Was any part of the payment for services? If so, you must report the total amount on Form 1099. Rents you pay to a manager (but not to the landlord) are excepted. Same if you pay for merchandise alone. Check your records for repairs, painters, consultants, builders and the like. Get name, address, and Tax I.D. Number. Call or use Form W-9. If someone gives his/her name, get a Social Security Number (looks like 555-55-5555). If a business name is used, get an Employer I.D. Number (looks like 55-5555555).
Rental Managers A property manager who runs your rental sends Form 1099 to you reporting the rents.
Nominees. Suppose you and your brother share a savings account. But, your Social Security number appears on the 1099-INT, even though half the income belongs to your brother. You are a “nominee”. Limits here are much lower. If you pay $10 or more to another you should send a Form 1099 to the other party. You use the same type of 1099 as you received, but you are filing as a “middle man”.
Getting the Forms I can help, or you can get forms from IRS and do them yourself. If you need my help, please call early! My tax season is hectic, and the February 1 deadline comes up quickly. If you need forms from IRS call 1-800-829-3676, or download them at www.irs.gov. You need both Form 1099 and Form 1096, which serves as a “cover”.
I hope this answers the questions… What is a 1099? Do You Need To Send Form 1099?