1099 Forms What is Form 1099-MISC and How Does It Impact You?

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Understanding Form 1099-MISC

IRS Form 1099-MISC is an information return utilized to report various payments made to self-employed individuals for their work during the calendar year. The business owner/payer is responsible for preparing and submitting Form 1099-MISC to the IRS for each individual.

After reporting payments, the payer must provide the recipient with copy B of Form 1099-MISC.

Interested in filing Form 1099-MISC? Create a free account and file 1099 in just a few easy steps. Receive real-time updates about your filing status.

Who Needs to File Form 1099-MISC?

A business owner/payer is required to file Form 1099-MISC at the end of the tax year if the payment made to the contractor(s) meets the following criteria:

  1. Paid a minimum of $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  2. Paid a minimum of $600
    • rents
    • prizes and awards
    • medical and health care payments
    • other income payments
    • payments to an attorney
    • crop insurance proceeds
    • cash paid from a notional principal contract to an individual
    • partnership, or estate
    • fishing boat proceeds
    • Section 409A deferrals
    • Or nonqualified deferred compensation

What Information is Required on Form 1099-MISC?

Sections For Entering Payer Information

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Complete the Payer Details section. This includes:

  • Name
  • Address
  • Contact phone number
  • Tax Identification Number (TIN)

Sections For Entering Recipient Information

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Complete the Recipient Details section. This includes:

  • TIN
  • Name
  • Street Address
  • City, State, Zip

Check Box for FATCA filing requirement

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Select this box if the following conditions apply to you:

  • If you are a payer based in the United States and have to comply with Chapter 4 account reporting as per section 1.1471-4(d)(2)(iii)(A).
  • If you are an FFI (Foreign Financial Institution) reporting payments to a U.S. account following an election outlined in Regulations section 1.1471-4(d)(5)(i)(A).

Form 1099-Misc Boxes

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Image of Form 1099 State Boxes 2023

Learn more about Form 1099-MISC Instructions to file Form 1099-MISC.

What are the 1099 Deadlines for 2024?

  • January 31st, 2024
    Recipient Copies

    Form 1099s must be distributed to the recipient on or before January 31st

  • February 28th, 2024
    Paper Filing

    Paper filing must be filed with the IRS on or before February 28th

  • April 1st, 2024

    Form 1099s must be e-filed directly to the IRS on or before April 1st

Visit our deadlines article to learn more about Form 1099 due dates.

Note: If the filing deadline lands on a Saturday, Sunday, or legal holiday, the due date will automatically be extended to the following business day.

The exception to these deadlines above is for filing Form 1099-NEC. Depending on the filing method, there is a month's advancement on the recipient and IRS copies being January 31st. Get started with BoomTax and file your 1099 with the IRS, state, and mail recipient copies on time.

If you find errors after filing your 1099 return with the IRS, promptly correct the information and submit the corrected Form 1099 and Form 1096 to the IRS. Also, provide your recipient with an updated 1099 showing the updated details. If you need to correct any state or local tax department information, file the form with the appropriate agencies, not the IRS.

Deadline for sending COPY B to the recipient is February 15th, 2024, if you report payments only in box 8 or 10.

What is the Difference Between Form 1099-MISC and 1099-NEC?

Until 2019, business owners/payers used Form 1099-MISC to report miscellaneous income and nonemployee compensations (NEC) paid to independent contractors and self-employed individuals. Due to the confusion caused by two different filing deadlines for 1099-MISC, the IRS reintroduced Form 1099-NEC in 2020 to report nonemployee compensation, separate from Form 1099-MISC.

Form 1099-NEC specifically reports nonemployee compensation, while Form 1099-MISC reports other miscellaneous expenses. Form 1099-NEC is not a replacement for 1099-MISC, but rather an alternative for reporting independent contractor payments. Nonemployee compensation is reportable if it meets the following IRS-defined conditions:

  • Payments made to a nonemployee
  • Payments for services in the course of your trade or business
  • Payments made to an individual, partnership, estate, or, in some cases, a corporation
  • Payment of $600 or more during the calendar year

Read this blog post for more information on the differences between 1099-MISC and 1099-NEC.

Changes in Form 1099-MISC Instructions for 2023

Box Previous Now
13 Previously used to report excess golden parachute payments Currently used to indicate the FATCA filing requirement
14 Previously used to report payment under NQDC plans Currently used to report excess golden parachute payments
15 Previously used to report state-withheld taxes Currently used to report payment under NQDC plans
16 Previously used to report the payer's state number Currently used to report state-withheld taxes
17 Previously used to report state income Currently used to report the payer's state number
18 Reserved Currently used to report state income

Learn more about the Form 1099-MISC 2023 changes.

What are the Form 1099-MISC 2021 Updates?

Form 1099-MISC underwent significant changes over the past three years. Until 2019, payers used Form 1099-MISC to report payments made to independent contractors, including nonemployee compensations, in Box 7. The IRS reintroduced Form 1099-NEC for the 2020 tax year to reduce confusion. Now, Form 1099-MISC is primarily used to report Miscellaneous Information.

For the 2021 tax year, the IRS made minor changes to Form 1099-MISC. The most notable 2023 change is the form’s title, which changed from “Miscellaneous Income” to “Miscellaneous Information.” Additionally, 1099-MISC Box 7 and Box 11 fields were updated.

Learn more about the IRS 1099-MISC 2023 changes.

What is the Penalty for Missing Form 1099 Deadline?

Failing to file Form 1099 by the deadline or meeting the deadline but providing incorrect recipient information can result in IRS penalties ranging from $60 to $630, depending on how late the form is submitted. The IRS has increased the penalty amounts for the 2024 filing year.

After the deadline, but within 30 days

$60 per form

After 31 days - August 1st

$120 per form

After August 1st, or not at all

$310 per form

Intentionally not filing

$630 per form

1099 penalties may be subject to the following:

  • Furnishing incorrect information on a return
  • Failure to provide the required information
  • Late filing of returns
  • Paper filing when required to file electronically (E-file 1099 if you have 10 or more information returns)

The IRS is accustomed to changing rules year-to-year, sometimes even in the middle of the current tax season! This is why having the most accurate information about the IRS requirements and deadlines for filing any Form 1099 is essential. Use reliable tax software to e-file your forms and stay updated on any changes in regulations or deadlines.

E-filing vs. Paper Filing

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  • Immediate real-time IRS updates
  • File 1000s of forms easily at once
  • Validates 1000s of IRS rules
  • Can help with questions in real-time in chat

Paper Filing

  • It can take weeks to hear a status update
  • Requires unique red ink form
  • Prone to human error
  • No expert to help with questions

Note: IRS recommends that payers utilize the e-file option over paper filing for faster processing.

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