Form 1099 MISC Explained
Webinar Details $219
- Webinar Length: 100 Minutes
- Guest Speaker: Chuck Borek
- Topic: Taxation and Accounting
- Credit: CPE 2.0, ATATX 1.5
There are 22 different forms of the 1099. Perhaps the most common is the 1099-MISC, on which certain payors are required to report everything from crop insurance proceeds to rents and royalties. Each type of payment is subject to its own reporting thresholds and exemptions. Needless to say, all of these rules are enough to frustrate even the most diligent payors. In this course we will demystify the 1099-MISC and provide you with the tools and resources to approach the filing of this form with confidence.
Topics covered include:
- The difference between 1099-MISC and 1099-NEC
- Common misunderstandings about 1099 reporting generally
- Various circumstances when 1099-MISC reporting is required
- The panoply of reporting requirements with regard to the 1099-MISC
- Exceptions to the reporting requirements
- Reporting payments made to attorneys
- Reporting deceased employee’s wages paid to an estate
- Penalties and how to avoid them
- How Many Different Types of 1099s? 00:02:35
- Panoply of 1099s 00:08:04
- Panoply of 1099s Cont’d 00:12:11
- Panoply of 1099s Cont’d 00:13:41
- Panoply of 1099s Cont’d 00:14:27
- A Bit O’ History 00:16:23
- Form 1099-MISC Example 00:16:47
- Problems 00:19:20
- Common Misunderstandings About 1099 - What We Say 00:21:40
- Common Misunderstandings About 1099 - What They Hear 00:22:19
- 1099 DOES NOT Determine a Tax Liability 00:22:51
- There is No Penalty for Unnecessary 1099s 00:29:05
- When is 1099-NEC Reporting Required? 00:29:47
- Payments Made Jointly to Attorney and Plaintiff 00:31:06
- 1099-MISC Triggers 00:35:34
- 1099-MISC Triggers Cont’d 00:37:02
- Applicable Payors 00:39:28
- Exceptions to Reporting Requirements 00:42:10
- Exceptions to Reporting Requirements Cont’d 00:46:39
- Exceptions to Reporting Requirements Cont’d 00:50:04
- 1099-MISC Box by Box 00:51:33
- Form 1099-MISC - Box 100:53:49
- Box 1: Rents 00:55:10
- Box 1: Rents - Coin-Operated Amusements 00:58:57
- Form 1099-MISC - Box 2 01:00:51
- Box 2: Royalties - Do Not 01:01:41
- Box 2: Royalties - Do 01:03:13
- Form 1099-MISC - Box 3 01:05:29
- Box 3: Other Income 01:06:02
- Box 3: Other Income Cont’d 01:09:05
- Box 3: Other Income Cont’d 01:10:13
- Form 1099-MISC - Box 4 01:13:30
- Box 4: Federal Income Tax Withheld 01:13:57
- Form 1099-MISC - Box 5 01:22:21
- Box 5: Fishing Boat Proceeds 01:24:13
- Form 1099-MISC - Box 6 01:25:57
- Box 6: Medical and Health Care Payments 01:26:01
- Box 6: Medical and Health Care Payments Cont’d 01:28:06
- Box 6: Medical and Health Care Payments 01:30:45
- Form 1099-MISC - Box 8 01:31:00
- Box 8: Substitute Payments 01:31:53
- Form 1099-MISC - Box 15 01:33:36
- Box 15: NQDC 01:33:41
- Reporting Deceased Employee Wages 01:34:59
- Reporting Deceased Employee Wages Cont ‘d 01:34:59
- Post-Death Wages 01:36:49
- Furnishing Statements to Recipients - Filing Date 01:37:14
- Furnishing Statements to Recipients - Truncation 01:38:05
- Wrap-Up 01:39:02
- Questions 01:39:10
- Presentation Closing 01:41:40
- Accounts Payable (AP) 00:38:42
- Backup Withholding 01:13:58
- Exempt 00:40:58
- Expense Reimbursements 00:58:17
- Fair Market Value (FMV) 01:08:01, 01:24:32
- FIRE - File Information Returns Electronically 00:20:05
- Form 1099-A 00:08:09
- Form 1099-B 00:08:20
- Form 1099-C 00:08:30, 00:09:31, 00:24:23, 00:50:24
- Form 1099-CAP 00:11:51
- Form 1099-DIV 00:11:57
- Form 1099-G 00:12:01
- Form 1099-H 00:12:03
- Form 1099-INT 00:12:11
- Form 1099-K 00:12:25, 00:50:08
- Form 1099-LS 00:12:49
- Form 1099-LTC 00:12:43
- Form 1099-MISC 00:00:09, 00:01:24, 00:16:37, 00:21:35, 00:31:09, 00:35:35, 00:51:33, 00:59:40, 01:08:42, 01:29:25, 01:36:19, 01:37:19
- Form 1099-NEC 00:13:30, 00:29:51, 00:45:49, 00:58:16, 01:02:37
- Form 1099-OID 00:13:39
- Form 1099-PATR 00:13:44
- Form 1099-Q 00:13:52
- Form 1099-QA 0013:56
- Form 1099-R 00:14:09
- Form 1099-S 00:14:15, 01:02:47, 01:32:26
- Form 1099-SA 00:14:20
- Form 1099-SB 00:14:28
- Form W-2 00:47:34, 01:06:12, 01:25:46, 01:36:02
- Form W-9 00:45:18, 01:23:37
- Gross Proceeds Payment 00:37:10
- Intangible Property 01:01:00
- IRC Section 409A 00:37:14
- Liability 00:04:09
- Limited Liability Company (LLC) 00:43:29, 01:22:53
- Nonprofit Corporation 00:40:24, 00:42:25, 01:29:46
- Nonqualified Deferred Compensation (NQDC) 00:37:16, 01:33:40
- Real Property 00:55:16
- Schedule C 00:22:51, 00:57:32
- Transaction 00:03:23
- Wage 01:25:41, 01:35:06
Accounts Payable (AP): The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered.
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)
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 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)
FIRE - File Information Returns Electronically: The IRS FIRE system is the electronic network used to accept and process most types of filing forms. Technically, it stands for File Information Returns Electronically.
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.
Form 1099-A: Acquisition or Abandonment of Secured Property - On Form 1099-A, the lender reports the amount of the debt owed (principal only) and the fair market value (FMV) of the secured property as of the date of the acquisition or abandonment of the property.
Form 1099-B: Proceeds From Broker and Barter Exchange Transactions is an Internal Revenue Service (IRS) tax form that is issued by brokers or barter exchanges. The form lists the gains or losses of all broker or barter exchange transactions.
Form 1099-C: According to the IRS, nearly any debt you owe that is canceled, forgiven or discharged becomes taxable income to you. You'll receive a Form 1099-C, "Cancellation of Debt," from the lender that forgave the debt.
Form 1099-CAP: File this form for shareholders of a corporation if control of the corporation was acquired or it underwent a substantial change in capital structure. This form is furnished to shareholders who receive cash, stock, or other property from an acquisition of control or a substantial change in capital structure.
Form 1099-DIV : Form 1099-DIV: Dividends and Distributions is an Internal Revenue Service (IRS) form sent to investors who receive distributions from any type of investment during a calendar year. Investors can receive multiple 1099-DIVs. Each Form 1099-DIV should be reported on an investor's tax filing.
Form 1099-G: The 1099-G Form, “Certain Government Payments,” is a federal tax form filed by federal, state, or localgovernment entities if they provide Reemployment Assistance benefit payments to eligible claimants.This form is also provided to claimants to show the total amount of unemployment compensation paid tothe claimant during the calendar year
Form 1099-H: Form 1099-H is a federal income tax form required by the IRS. The form is filed by health insurance providers that receive advance payments on behalf of the taxpayer as a recipient of TAA, ATAA, RTAA, or PBGC.
Form 1099-INT: Form 1099-INT is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.
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-LS: File Form 1099-LS if you are the acquirer of any interest in a life insurance contract in a reportable policy sale. An acquirer is any person that acquires an interest in a life insurance contract (through a direct acquisition or indirect acquisition of the interest) in a reportable policy sale.
Form 1099-LTC: Form 1099-LTC, "Long-Term Care and Accelerated Death Benefits," is the IRS form that enables individual taxpayers to report long-term care (LTC) benefits, including accelerated death benefits.
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-OID: Form 1099-OID is a tax form intended to be submitted to the Internal Revenue Service by the holder of debt instruments which were discounted at purchase to report the taxable difference between the instruments' actual value and the discounted purchase price.
Form 1099-PATR: File Form 1099-PATR, Taxable Distributions Received From Cooperatives, for each person to whom the cooperative has paid at least $10 in patronage dividends and other distributions described in section 6044(b), or from whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.
Form 1099-Q: If you're paying for school expenses from a 529 plan or a Coverdell ESA, you will likely receive an IRS Form 1099-Q, which reports the total withdrawals you made during the year.
Form 1099-QA: Any State or its agency or instrumentality that establishes and maintains a qualified ABLE program must file this form with the IRS for each ABLE account from which any distribution was made or which was terminated.
Form 1099-R: Form 1099-R is a tax form from the Internal Revenue Service (IRS) for reporting distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions.
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 1099-SA: A 1099-SA is a U.S. tax form that reports distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage medical savings account (MA MSA).
Form 1099-SB: File Form 1099-SB if you are the issuer of a life insurance contract and you receive a statement from an acquirer in a reportable policy sale provided under section 6050Y(a) or you receive notice of a transfer of the life insurance contract to a foreign person.
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/)
Gross Proceeds Payment: When a business sells an asset, whether tangible or intangible, it receives a payment, which is the gross proceeds. The amount includes the costs of production and other costs and expenses related to the transaction.
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.
Intangible Property: Intangible property, also known as incorporeal property, describes something which a person or corporation can have ownership of and can transfer ownership to another person or corporation, but has no physical substance, for example brand identity or knowledge/intellectual property. (en.wikipedia.org)
Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.
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.
Non-Profit Organizations (NPO): A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrary with an entity that operates as a business aiming to generate a profit for its owners.
Nonprofit Corporation: A nonprofit organization, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is an organization dedicated to furthering a particular social cause or advocating for a shared point of view.
Real Property: Real property is land and any property attached directly to it, including any subset of land that has been improved through legal human actions. Examples of real properties can include buildings, ponds, canals, roads, and machinery, among other things
Schedule C: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if: Your primary purpose for engaging in the activity is for income or profit.
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.