Here is everything you need to know about the 1099 reporting requirements for the 2021 tax year.
1099 forms play a critical role in reporting the income and expense information of a business. Compensations paid to employees, payments made to independent contractors, fees paid to attorneys, and so on are all recorded throughout the year. These transactions are reported through the 1099 forms to help the IRS match the information and process the tax.
If you’re self-employed or a business owner, you must know just how chaotic the filing season can be. While filing is just one side of the coin, the preparation, internal audits, reviews, validation and other crucial steps leading up to the filing season can be quite hectic.
And if you’re sick and tired of looking up the filing information for each of your 1099 forms online, we have some great news for you.
This blog will take you through the filing requirements for all 1099 forms (in one place), giving you the much-needed quick facts and insights to ease your way into the filing season that’s fast approaching in the New Year.
So, let’s get to it.
What Are 1099 Forms?
1099 forms are a series of tax information reporting forms that the IRS refers to as ‘information returns’. These information returns report certain payments and income information of business entities and self-employed individuals to the IRS. The IRS requires the taxpayers to prepare and file the completed 1099 forms by certain due dates.
What Are 1099 Form Types?
There are a variety of variants to 1099 forms, such as 1099-MISC, 1099-NEC, 1099-DIV, 1099-K, and so on. All of these information returns have a unique purpose in terms of reporting a variety of information to the IRS.
Fundamentally, the mechanism of all 1099 forms is pretty much the same. All 1099 forms report certain information about the taxpayer to the IRS, giving the forms their “information returns” status.
The following is a table of 1099 forms along with their information reporting purpose. This will help you understand each of the 1099 forms.
|1099-A||Acquisition or Abandonment of Secured Property|
|1099-B||Proceeds From Broker and Barter Exchange Transactions|
|1099-C||Cancelation of Debt|
|1099-CAP||Changes in Corporate Control and Capital Structure|
|1099-DIV||Dividends and Distributions|
|1099-G||Certain Government Payments|
|1099-H||Health Coverage Tax Credit (HCTC) Advance Payments|
|1099-K||Merchant Card and Third-Party Network Payments|
|1099-LTC||Long-Term Care and Accelerated Death Benefits|
|1099-OID||Original Issue Discount|
|1099-PATR||Taxable Distributions Received From Cooperatives|
|1099-Q||Payments From Qualified Education Programs|
|1099-R||Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.|
|1099-S||Proceeds From Real Estate Transactions|
|1099-SA||Distributions From an HSA, Archer MSA, or Medicare Advantage MSA|
|RRB-1099||Railroad Retirement Board Statement|
|SSA- 1099||Social Security Benefit Statement|
Are You Required To File 1099 Forms?
If you have generated an income amounting to $600 or more and/or paid $600 or more to an entity or an independent contractor in exchange for their services, then you’re required to file 1099 forms for the tax year.
Should You (Payer) Send 1099 Forms to Your Payees?
When a business pays an independent contractor for their services, the transactional information is recorded and reported through 1099 forms.
The IRS requires the payer (the business) to send a copy of the 1099 forms to the payee (freelancer, independent contractor, and vendor) and have the information validated. Once, the tax information reported in the 1099 forms is mutually agreed upon by both parties, the payer files the returns with the IRS.
To reiterate; yes. If you have paid your payee $600 or more in a tax year and you’ve reported the same on your 1099 forms, then you must send a copy of the 1099 form to the payee.
What Is The Minimum Reportable Amount For 1099 Forms?
For 1099-NEC, non-employee compensations, the Minimum Amount Reported is $600. However, if you paid your vendors less than $600, you don’t have to send a copy of the 1099-NEC to the payee. But wait! You are still required to report it and file with the IRS. The IRS uses this information to cross-verify the income information of the recipient (payee).
The following table will give you a good understanding of the Minimum Amount Reported for each of the 1099 forms.
|Form||Form Description||Minimum Amount Reported|
|1099-A||Acquisition or Abandonment of Secured Property||$10,000|
|1099-B||Proceeds From Broker and Barter Exchange Transactions||Any Amount|
|1099-C||Cancelation of Debt||$600|
|1099-CAP||Changes in Corporate Control and Capital Structure||$100 million|
|1099-DIV||Dividends and Distributions||$10 ($600 for liquidations)|
|1099-G||Certain Government Payments||$10|
|1099-H||Health Coverage Tax Credit (HCTC) Advance Payments||Any amount|
|1099-INT||Interest Income||$10 ($600 for some business-related interest)|
|1099-K||Merchant Card and Third Party Network Payments||$20,000|
|1099-LTC||Long-Term Care and Accelerated Death Benefits||Any amount|
|1099-MISC||Miscellaneous Income||$600 for non-employee compensation|
($10 for royalties and most other sources)
|1099-NEC||Nonemployee Compensation||$600 for non-employee compensation|
($10 for royalties and most other sources)
|1099-OID||Original Issue Discount||$10|
|1099-PATR||Taxable Distributions Received From Cooperatives||$10|
|1099-Q||Payments From Qualified Education Programs||Any amount|
|1099-R||Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.||$10|
|1099-S||Proceeds From Real Estate Transactions||$600|
|1099-SA||Distributions From an HSA, Archer MSA, or Medicare Advantage MSA||Any amount|
|RRB-1099||Railroad Retirement Board Statement||Any amount|
|SSA- 1099||Social Security Benefit Statement||Any amount|
When Are 1099 Forms Due To The IRS?
The IRS requires the taxpayers to file their information returns by a specific date. Due to the re-introduction of Form1099-NEC, the 30-day automatic extension of certain 1099 forms has been removed, accelerating the 1099 filing deadlines.
The following table will help you understand the 1099 filing due dates by which you are required to submit the 1099 forms to the IRS.
|Form||Form Description||IRS Due Date|
|1099-A||Acquisition or Abandonment of Secured Property||02/28|
|1099-B||Proceeds From Broker and Barter Exchange Transactions||02/28|
|1099-C||Cancelation of Debt||02/28|
|1099-CAP||Changes in Corporate Control and Capital Structure||02/28|
|1099-DIV||Dividends and Distributions||02/28|
|1099-G||Certain Government Payments||02/28|
|1099-H||Health Coverage Tax Credit (HCTC) Advance Payments||02/28|
|1099-K||Merchant Card and Third-Party Network Payments||02/28|
|1099-LTC||Long-Term Care and Accelerated Death Benefits||02/28|
|1099-OID||Original Issue Discount||02/28|
|1099-PATR||Taxable Distributions Received From Cooperatives||02/28|
|1099-Q||Payments From Qualified Education Programs||02/28|
|1099-R||Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.||02/28|
|1099-S||Proceeds From Real Estate Transactions||02/28|
|1099-SA||Distributions From an HSA, Archer MSA, or Medicare Advantage MSA||02/28|
|RRB-1099||Railroad Retirement Board Statement||02/28|
|SSA- 1099||Social Security Benefit Statement||02/28|
When Are 1099 Forms Due To Your Payees/Vendors?
The following table will help you understand the 1099 filing due dates by which you are required to send the 1099 forms to the payee.
|Form||Form Description||Payee Due Date|
|1099-A||Acquisition or Abandonment of Secured Property||01/31|
|1099-B||Proceeds From Broker and Barter Exchange Transactions||02/15|
|1099-C||Cancelation of Debt||01/31|
|1099-CAP||Changes in Corporate Control and Capital Structure||01/31|
|1099-DIV||Dividends and Distributions||01/31|
|1099-G||Certain Government Payments||01/31|
|1099-H||Health Coverage Tax Credit (HCTC) Advance Payments||01/31|
|1099-K||Merchant Card and Third-Party Network Payments||01/31|
|1099-LTC||Long-Term Care and Accelerated Death Benefits||01/31|
|1099-OID||Original Issue Discount||01/31|
|1099-PATR||Taxable Distributions Received From Cooperatives||01/31|
|1099-Q||Payments From Qualified Education Programs||01/31|
|1099-S||Proceeds From Real Estate Transactions||01/31|
|1099-SA||Distributions From an HSA, Archer MSA, or Medicare Advantage MSA||01/31|
|RRB-1099||Railroad Retirement Board Statement||01/31|
|SSA- 1099||Social Security Benefit Statement||01/31|
Prepare & File Your 1099 Forms Electronically With Tax1099
With the paper file restrictions proposed for 1099 forms for the 2021 tax year (to be filed in Jan 2022); businesses are looking for reliable electronic filers like Tax1099 to eFile bulk 1099 forms quickly.
Tax1099, an authorized agent of the IRS, enables businesses like you to prepare, validate, and file 1099 and other information returns electronically.
With sleek security features, 12+ real-time data management integrations, real-time TIN Matching, W-9 Manager, access to 24×7 tax support, Scheduled eFile, and timely reminders, all your tax information reporting needs are met efficiently on one platform.
Head over to Tax1099 to get started.