Form 1099 MISC Explained
Form 1099-MISC is one of the most common Information Reporting Forms that businesses, estates, trusts and non-profits are required to file at the end of the calendar year. It is also the Form 1099 that most commonly has errors identified by the IRS. So what can you do NOW to prepare a Form 1099-MISC next January and avoid notices of errors from the IRS? By developing best practices and exercising due diligence collecting data to be included on the Forms 1099-MISC.
- The most common mistakes are not the amounts in the boxes but the mis-match of the payee’s name and the payee’s Identification Number whether it be a Social Security Number, Employer’s Identification Number, or Taxpayer’s Identification Number.
- The second most common mistake is failure to prepare Form 1099-MISC for payment of services of $600 or more.
- Lastly, by confusing whether the amount goes in Block 3, Other Income, or Block 7, Nonemployee Compensation.
At the completion of this course you will have the tools necessary to evaluate the W9 and prepare a Form 1099-MISC with all the blocks properly completed.
- Review W-9 for Accuracy & Completeness
- Match W-9 SSN, EIN, TIN to IRS records
- Entities Who Should Send 1099 MISC
- Entities Who Should Receive a 1099-MISC
- Block by Block Instructions of 1099-MISC
Important Issues Covered:
- What name and EIN/SSN goes on the 1099-MISC?
- How do I know what amount goes in which block?
- Example: Block 3, Other Income, versus Block 7, Non-Employee Compensation
- Example: Block 7, Non-Employee Compensation Paid to Attorneys or Block, 14, Gross Proceeds Paid to an Attorney
- Example: Block 6, Medical and Health Care Payments