When Do I Have to Issue a Form 1099-MISC?

When you are self-employed as an independent contractor or you have your own business, you have to file certain information returns for tax purposes when you make payments for rent, royalties, and services rendered to your business by persons who are not your employees. These returns serve to inform the recipients of the income they must report on the U.S. federal income tax returns. Copies of these information returns are sent to the Internal Revenue Service (IRS) so they can compare the amounts reported on the information returns filed by the payer with the income reported by the recipients on their tax returns. And, these information returns serve as support for you to be able to claim these payments as deductible business expenses on your own tax return.

What Is Form 1099-MISC?

Form 1099-MISC is one of the IRS tax information returns. It is used to report payments made during the year for different purposes as defined by the tax law. Forms 1099-MISC are sent to the recipients of the payments, so that they have the information they need to include these payments on their income tax returns, and are also sent to the IRS, for purposes of proving that all payments are actually reported by the recipients as income, and to corroborate the deductions that payers take for these expenses.

Form 1099-MISC is one of the 1099 series forms and is used to report payments not taken into consideration in one of the other form 1099, which are for specific purposes.

When Do I Have to Issue the Form 1099-MISC?

When you have made certain payments during the year that constitute income to the persons who received those payments, and those persons are not your employees, you have to issue a Form 1099-MISC. The payments that have to be reported are those made in the course of your occupation or business. Non-profit organizations are also subject to the requirements for issuing this form. But you do not have to report payments you make for personal expenses.

Payments You Have to Report