Who Gets 1099s

Today TaxMama hears from Linda in Pennsylvania, who tells us “I’m in charge of the mailing of 1099 MISCs for 2009. Who gets a 1099? Who doesn’t get one? Are there corporations that get 1099s? I think attorneys and accountants receive them.”

Dear Linda,

That’s a good question.

Basically, 1099-MISC is issued to people who are paid $600 or more in any year for services they have provided to a business. http://www.irs.gov/pub/irs-pdf/f1099msc.pdf

You issue them to any unincorporated service provider. You’re right about the need to issue them to some corporations. Those would be legal corporations or medical corporations.

There’s no need to send the 1099s to accountancy corporations or tax corporations. Perhaps IRS hasn’t seen as much income avoidance among us as they have with attorneys and health care providers?

Read page 13 of the instructions to the Form 1099-MISC for others to whom you should be issuing 1099s. http://www.irs.gov/pub/irs-pdf/i1099gi.pdf

Please note: Services include rents. So if your business is paying rent to an individual or partnership or LLC that files their returns as partnership, you are required to issue 1099s to them as well. Since, as a payer, we have no way of knowing how an LLC files its tax returns, I generally recommend issuing 1099-MISCs to all LLCs.

Incidentally, remember to have all payees fill in and sign a Form W-9 before they get their next check. It’s easier to get their taxpayer identification numbers when they have a check waiting, then after they have been paid. http://www.irs.gov/pub/irs-pdf/fw9.pdf
And remember, you can find answers to all kinds of questions about 1099s and other tax issues, free. Where? Where else? At TaxMama.com

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