What is 1099-MISC form?

1099-MISC form is used to report certain types of payments made in the course of a trade or business. If you're a small business owner who has hired the services of an independent contractor or freelancer, you may need to file and submit the 1099-MISC form to both the Internal Revenue Service and the person or business that you paid. Normally, a 1099-MISC form has to be reported if at least $600 has been paid to the recipient.

Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d), farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts. Payments by federal, state, or local government agencies are also reportable.

Who must file 1099-MISC form?

The basic rule is that you must file a 1099-MISC whenever you pay an unincorporated independent contractor, who is a sole proprietor or member of a partnership or LLC, $600 or more in a year for work done in the course of your trade or business by direct deposit or cash.

File form 1099-MISC for each person to whom you have paid during the year:
  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
    • Payments to an attorney.
    • Any fishing boat proceeds.

Exceptions to 1099-MISC form filing

Some payments do not require to be reported on form 1099-MISC, although they may be taxable to the recipient. Payments for which a form 1099-MISC is not required include:
  • Payments to a corporation (including a LLC that is treated as a C or S corporation.
  • Payments for merchandise, telegrams, telephone, freight, storage, and similar items.
  • Payments of rent to real estate agents or property managers.
  • Wages paid to employees (to be reported on form W-2)
  • Military differential wage payments made to employees while they are on active duty in the Armed Forces or other uniformed services (report on form W-2)
  • Business travel allowances paid to employees (may be reportable on form W-2)
  • Cost of current life insurance protection (report on form W-2 or form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.)
  • Payments to a tax-exempt organization including tax-exempt trusts (IRAs, HSAs, Archer MSAs and Coverdell ESAs), the United States, a state, the District of Columbia, a U.S. possession, or a foreign government.
  • Payments made to or for homeowners from the HFA Hardest Hit Fund or similar state program (report on form 1098-MA).
  • Compensation for injuries or sickness by the Department of Justice as a public safety officer disability or survivor's benefit, or under a state program that provides benefits for surviving dependents of a public safety officer who has died as the direct and proximate result of a personal injury sustained in the line of duty.
  • Compensation for wrongful incarceration for any criminal offense for which there was a conviction under federal or state law. See section 139F, Certain amounts received by wrongfully incarcerated individuals.

How to eFile 1099-MISC form?

It takes 3 simple steps to eFile your 1099-MISC form with 1099smartfile.com
  • Sign up on our website for free.
  • Fill in the payer, recipient(s) information. Create an e-Filing (electronic version of 1099-MISC form).
  • Submit the e-Filing and we take care of the rest.

You will receive an email status confirmation within 24 hours depending on the IRS workload and you can check your status on 1099smartfile.com.

Filing Deadlines:

Tax FormRecipient DeadlinePaper Filinge-Filing
1099-NECJan 31, 2024Jan 31, 2024Jan 31, 2024
1099-MISC (No Data in Box 8 or 10)Jan 31, 2024Feb 28, 2024April 1, 2024
1099-MISC (Data in Box 8 or 10)Feb 15, 2024Feb 28, 2024April 1, 2024