Be prepared to provide 1099s

Form 1099s are the counter part to the W-2s, they are for payments made by all types of business and nonprofit organizations for non payroll payments like interest, dividends or self employment income. There are 16 different types of 1099s and are due to recipients by January 31, 2011 and to the IRS by February 28, 2011. Listings of these are at the bottom of this blog.

One of the more prevalent 1099s is the1099-MISC, which is for Miscellaneous Income. 1099-MISC covers the following:
(1) Royalties or broker payments in lieu of dividends or tax-exempt interest
(2) Services (including parts and materials). If you received less than $600 in the year a 1099 is not required to be provided
(3) Rents
(4) Prizes and awards
(5) Other income payments

Payments to Corporations are exempt except for the following:
(1) Medical and health care payments
(2) Fish purchases for cash. “Fish” means all fish and other forms of aquatic life
(3) Attorneys’ fees
(4) Substitute payments in lieu of dividends or tax-exempt interest
(5) Payments by a federal executive agency for services