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Getting Ready for 1099 Filing

All businesses including:

  • LLC’s
  • S Corporations
  • C Corporations
  • Self-Employed Owners
  • Nonprofit Organizations

    are required to file their 1099 Forms by January 31, 2024 to the recipients.

    The Form 1099-NEC is due to the recipient and the IRS by January 31, 2024. For the remainder of the 1099 forms (1099-Misc, 1099-Div, 1099-Int, 1099-R, etc.), the 1099 filings for the 2023 calendar year are due to recipients by January 31, 2024 and to the IRS by February 28, 2024.

    Now is the time to begin gathering all information that will be needed to prepare the 1099 forms. To ensure a streamlined process, company bookkeeping should be up-to-date through December 31, 2023 and a Form W-9 should be obtained for all payees meeting the requirements described below. As always, we are available to prepare the 1099 Forms for your business or organization.

    Please do not send us the information until after December 31, 2023 to ensure that all payments are included.

    All taxpayers (both individual and businesses) are required to report certain business transactions to the Internal Revenue Service. This includes taxpayers that are self-employed, all businesses, and nonprofit organizations.

    Types of compensation which require informational reporting:

    For a complete list of payments see irs.gov (Form 1099-NEC, Form 1099-MISC & Payment Types to Report):
    • Payments of $600.00 or more*:
    • Non-employee Compensation (including subcontractors, independent contractors who provide goods and services, temporary employees and payroll service providers) Now Reported on Form 1099-NEC
    • Rent
    • Prizes and Awards (includes prizes of cash and/or goods)
    • Commissions
    • Consulting Fees
    • Professional Fees (including attorneys – not eligible for exception below)
    • Royalties – payments of $10 or more
    • Interest payments of $10 or more to a non-financial institution requires the issuance of Form 1099-INT
    • Receipt of mortgage interest of $600 or more requires the issuance of a Form 1098
      * The exception to this reporting is if any of the amounts paid above are to an entity incorporated under state law.  

Type of recipients that should be issued 1099 Forms:

  • Individuals
  • Sole Proprietors (self-employed individuals)  
  • Single-Member LLC’s
  • Partnerships
  • Realty Trusts
  • Attorneys (regardless of entity type)
  • Limited Liability Companies

If any of the conditions above are met, you are required to send the recipients/payee a Form 1099 reporting the total amounts paid during the calendar year (even if you have a fiscal year end that does not end in December, amounts reported on Form 1099 must be on a calendar year basis).

Important items to note:

1099 Presentation

For 1099 forms issued to sole proprietors, the Form 1099 will report the individual’s name listed first and any “doing business as (DBA)” name is listed second. The DBA name cannot be the only name listed. The taxpayer identification number (TIN) should either be the individual’s Social Security number, even if the sole proprietor has an Employer Identification Number (“EIN”).

For a single-member LLC, the individual’s name is listed first and the LLC’s name second. The single-member LLC is required to provide their social security number, even if the LLC has an EIN. If the LLC is a corporation or partnership, enter the entity’s EIN.

Reimbursed Expenses
If you require independent contractors to provide proof of their expenses and these expenses are separately stated on an invoice, (via receipts or other documentation) you are not required to include those expense reimbursements on Form 1099. However, the expense receipts or other documentation must be retained for any expense reimbursements, whether you have included on Form 1099 or not.

Services

Reporting payments for services will include the parts or materials used to perform those services if supplying the parts or materials was incidental to providing the service. This means if you pay more for the service than for the parts to carry out the service, report the entire amount.

Please be advised that the information above is not inclusive.  If you have any questions, please contact us.

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Contact Us
Tel: 508-871-7178
Fax: 508-871-7179

Mailing Address
Smith, Sullivan & Brown, P.C.
80 Flanders Road, Suite 302
Westborough, MA 01581

Professional Memberships:
Member of American Institute of Certified Public Accountants
Massachusetts Society of Certified Public Accountants
Corridor 9/495 Regional Chamber of Commerce
Metrowest Chamber of Commerce

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