Form 1099 MISC Explained

1. Introduction
2. The Law -Learn it, Know it, Live it 00:01:04
3. New 2026 Form 1099-NEC 00:10:34
4. New 2026 Form 1099-MISC 00:23:05
5. 1099-NEC 00:27:03
6. 1099-MISC 00:29:28
7. 1099-MISC Box One - Rent/Exceptions To Reporting 00:27:03
8. 1099-MISC Box One - Special Form 1099-S 00:29:28
9. 1099-MISC Box Two - Extractive Industries 00:34:43
10. 1099-MISC Box Two - Creative Industries 00:36:45
11. 1099-MISC Box Two - I.P./Intellectual Property 00:38:14
12. 1099-MISC Box Two - Royalties 00:39:40
13. 1099-MISC Box Three - Prizes and Awards 00:40:20
14. 1099-MISC Box Three - Settlement Payments 00:41:13
15. 1099-MISC Box Four - Backup Withholding 00:48:02
16. 1099-MISC Box Six - Medical Payments 00:49:44
17. 1099-MISC Box Six - Medical Service Providers 00:53:26
18. 1099-MISC Box Six - Examples of Exceptions 00:53:27
19. 1099-MISC Box Ten - Legal Services 00:54:46
20. 1099-MISC vs. 1099-NEC Director’s Payments 00:55:31
21. Proposed W-9 Changes 00:59:44
22. Name and Tin “Cheat Sheet” 01:09:40
23. Name and Tin “Cheat Sheet” Cont’d 01:10:41
24. Validating W-9 Data - When to Get an Updated Form W-9 01:11:54
25. Validating W-9 Data - Identifying Your Payment: Exempt Payments 01:14:00
26. Validating W-9 Data - Identifying Your Payee: How to Know Who’s Who 01:14:47
27. Validating W-9 Data - U.S. Persons 01:16:11
28. Validating W-9 Data – Problem Payees - U.S. Corporations 01:16:29
29. Validating W-9 Data – LLC Reminders - The LLC 01:17:49
30. Validating W-9 Data – LLC Reminders - The LLC as the Disregarded Entity 01:18:19
31. Validating W-9 Data - Tax Exempt Organization Search Tool 01:20:02
32. TIN Match Program - Using The Program 01:20:55
33. Validating Payee Data – Delegated Authority 01:21:54
34. Validating W-9 Data: Watch Out For The Middleman 01:22:54
35. Backup Withholding Tips - Four Triggers 01:27:36
36. B-Notice Response Best Practices - B-Notice: CP-2100 01:28:45
37. B-Notice Response Best Practices - IRS Matching 01:31:37
38. B-Notice Response Best Practices - 1st Notice 01:32:03
39. B-Notice Response Best Practices - 2nd Notice 01:34:00
40. IRS Form 972-CG Proposed Penalty Notice and Reasonable Cause - Notices & Penalties 01:34:49
41. IRS Form 972-CG Proposed Penalty Notice and Reasonable Cause - Proposed Penalty Notice Contents 01:35:56
42. IRS Form 972-CG Proposed Penalty Notice and Reasonable Cause - Responding 01:36:30
43. IRS Form 972-CG -Proving Reasonable Cause: An Overview 01:37:22
44. IRS Form 972-CG Proposed Penalty Notice and Reasonable Cause -  Prepare The 972-CG Penalty Waiver Request Letter 01:37:36
45. IRS Form 972-CG Proposed Penalty Notice and Reasonable Cause - Reasonable Cause and Written Guidance 01:38:50
46. Protect Yourself 01:39:47
47. Attendee Questions 01:40:21
48. Presentation Closing 01:46:27

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  Steven Mercatante

  Steven Mercatante is the principal and founder of TIR Consulting, LLC. He is a nationally recognized leader in tax reporting education and consulting on specialized compliance issues. He has conducted on-site consultation for corporate clients from across the world and led countless seminars and web [...]

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• Audit 00:17:27, 01:21:28
• B-Notice 00:08:31,  01:04:36, 01:28:38,  01:38:16
• Backup Withholding 00:12:14  01:04:59, 01:12:04, 01:15:08, 01:34:20
• CP-2100 01:29:33, 01:32:28
• CP-2100-A 01:29:51
• DBA -Doing Business As 01:02:51
• Disregarded Entity 01:02:45, 01:07:04, 01:18:23
• EIN 01:02:33, 01:11:27
• Exempt 00:47:30, 00:54:12, 01:14:24
• Expense Reimbursements 00:42:14
• Expenses 00:38:00
• Fair Labor Standards Act (FLSA) 00:22:23
• Fair Market Value 00:40:20
• FATCA 01:02:02, 01:05:03
• Federal Insurance Contributions Act (FICA) 00:45:28
• Federal Unemployment Tax Act (FUTA) 00:45:29
• Form 945 00:49:06, 00:49:35
• Form 1099-K 01:14:32
• Form 1099-MISC 00:10:35, 00:23:08, 00:31:20, 00:49:31, 00:56:22
• Form 1099-MISC 00:11:31, 00:18:14
• Form 1099-NEC 00:10:36, 00:26:34, 00:37:55, 00:49:31
• Form 1099-NEC 00:11:3, 00:18:10
• Form 1099-S 00:30:11, 00:36:46
• Form W-2  00:17:47, 00:45:24
• Form W-9 00:06:03, 00:14:04, 00:59:48,  01:11:33, 01:21:26, 01:32:20, 01:38:19
• Independent Contractor 00:11:24, 00:20:17, 00:49:28, 01:21:01
• Intangible Personal Property 00:38:21
• IRC Sec. 6109(a)(2) 00:01:04
• IRC Section 409A 00:56:46, 01:44:31
• IRC Section 3406(a) 00:01:04
• IRC Section 3406(a) 01:29:54
• IRC Section 6041(a) 00:01:04
• IRC Section 6045 01:24:12, 01:42:22
• IRC Section 6721 01:36:37
• IRC Section 6722 01:36:38
• IRC Section 6724 01:36:
• Limited Liability Company (LLC) 01:02:49, 01:18:21, 01:44:39
• Overtime 00:14:40, 00:19:58, 00:24:16,
• Personal Property 00:32:42
• Personal Property 00:32:43
• Reasonable Cause 01:15:49
• Sole Proprietor 01:02:46, 01:12:56
• Tax Exempt Organization Search Tool 01:20:09, 01L45:25
• TIN 01:02:38, 01:30:03, 01:34:16
• TIN Match Program 01:00:30, 01:38:15
• Transaction 00:30:36, 00:46:06
• Vendor 00:11:36, 00:34:23, 00:47:22, 00:52:54, 01:15:13, 01:36:27

Audit: A formal examination of an organization's or individual's accounts or financial situation

B-Notice: A notice from the IRS stating that one or more tax ID numbers were missing from a 1099 or do not match the IRS records.

Backup Withholding: Backup withholding is the tax that is levied on investment income, at an established tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive income taxes owed to them from investors' earnings. (www.investopedia.com)

CP-2100: It is a notice that tells a payer that he or she may be responsible for backup withholding. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.

CP2100-A: It is a notice that tells a payer that he or she may be responsible for backup withholding. It isaccompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.

DBA -Doing Business As: Sometimes it makes sense for a company to do business under a different name. To do this, the company has to file what's known as a DBA, meaning "doing business as." A DBA is also known as a "fictitious business name," "trade name," or "assumed name."

Disregarded Entity: A disregarded entity refers to a business entity with one owner that is not recognized for tax purposes as an entity separate from its owner. A single-member LLC ( “SMLLC”), for example, is considered to be a disregarded entity. (www.pntax.com)

EIN: The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification.

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

Expense: Offset (an item of expenditure) as an expense against taxable income.

Expense Reimbursement: Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations. (www.thebalancecareers.com)

Fair Labor Standards Act (FLSA): The Fair Labor Standards Act of 1938 29 U.S.C. § 203 is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits most employment of minors in "oppressive child labor".

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Federal Insurance Contributions Act (FICA): The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Unemployment Tax Act (FUTA): The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government's oversight of each state's unemployment program. Only employers pay FUTA tax. You must deposit the tax quarterly and file an annual form.

Form 1099-K: A payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction, that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.

Form 1099-MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payments made to nonemployee individuals, such as independent contractors, during the calendar year. (www.shrm.org)

Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.

Form 1099-S: A Form 1099-S is a tax document used to ensure that the full amount received for a real estate sale of some kind is accurately reported. A 1099-S can also be used to report income made on a rental property or investment property. For selling real estate, the buyer must complete and file their own 1099-S.

Form 945: IRS Form 945 is titled Annual Return of Withheld Federal Income Tax. Form 945 is used to report withheld federal income tax from nonpayroll payments, including distributions from qualified retirement plans.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)

Form W-9: Form W-9 (officially, the "Request for Taxpayer Identification Number and Certification") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). - Wikipedia (https://en.m.wikipedia.org/)

IRC Section 3406(a): Requires that, under certain circumstances, including the payee's failure to provide a TIN, the payer must perform backup withholding.

IRC Section 409A: Section 409A of the United States Internal Revenue Code regulates nonqualified deferred compensation paid by a "service recipient" to a "service provider" by generally imposing a 20% excise tax when a certain design or operational rules are contained in the section are violated.

IRC Section 6041(a): Provides that persons engaged in trade or business must report certain payments on an information return.

IRC Section 6045: Every person doing business as a broker shall, when required by the Secretary, make a return, in accordance with such regulations as the Secretary may prescribe, showing the name and address of each customer, with such details regarding gross proceeds and such other information as the Secretary may by forms or regulations require with respect to such business.

IRC Section 6109(a)(2): Requires that a payee provide a TIN to the payer when the payment will be reportable on an information return.

IRC Section 6721: If an employer fails to file a correct Information, return by the due date, and cannot show reasonable cause, the employer may be subject to a penalty as provided under IRC Section 6721.

IRC Section 6722: IRC Sec. 6722 authorizes a civil penalty for failing to provide payees with correct copies of statements furnished to the IRS.

IRC Section 6724: I.R.C. § 6724(a) Reasonable Cause Waiver — No penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (https://www.investopedia.com/)

Intangible Personal Property: Intangible personal property is an item of individual value that cannot be touched or held. Intangible personal property can include any item of worth that is not physical in nature but instead represents something else of value. Examples of intangible personal property include patents, copyrights, life insurance contracts, securities investments, and partnership interests.

Limited Liability Company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.

Personal Property: Personal property is something that you could pick up or move around. This includes such things as automobiles, trucks, money, stocks, bonds, furniture, clothing, bank accounts, money market funds, certificates of deposit, jewels, art, antiques, pensions, insurance, books, etc.

Reasonable Cause : Reasonable cause is based on all the facts and circumstances in your situation. The IRS will consider any reason which establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.

Sole Proprietor: A business that legally has no separate existence from its owner. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

TIN: A Taxpayer Identification Number is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States, it is also known as a Tax Identification Number or Federal Taxpayer Identification Number.

TIN Match Program: TIN Matching is part of a suite of Internet-based pre-filing e-services that allows “authorized payers” the opportunity to match 1099 payee information against IRS records prior to filing information returns.

Tax Exempt Organization Search Tool: Tax Exempt Organization Search helps users find information about a tax-exempt organization’s federal tax status and filings.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.