Preparing Forms 1099-MISC can be difficult, but we are here to help simplify things!
Before you prepare your Forms 1099-MISC, you will need to gather the tax information for the business or payer and recipient or payee, as well as the amounts paid to the recipient.
What’s New for 2020?
Redesigned Form 1099-MISC.
Due to the creation of Form 1099-NEC, we have revised Form 1099-MISC and rearranged box numbers for reporting certain income. Changes in the reporting of income and the form’s box numbers are listed below.
- Payer made direct sales of $5,000 or more (checkbox) in box 7.
- Crop insurance proceeds are reported in box 9.
- Gross proceeds to an attorney are reported in box 10.
- Section 409A deferrals are reported in box 12.
- Non-qualified deferred compensation income is reported in box 14.
- Boxes 15, 16, and 17 report state taxes withheld, state identification number, and amount of income earned in the state, respectively.
A. Business Information
You will need to include the following information on each 1099-MISC form you prepare.
- Federal Employer ID Number
- Business Name
- Business Address
B. Recipient’s Information
Before completing a 1099-MISC form for any non-employee, have them fill out a W-9 form. A W-9 form, like W-4s for employees, will provide you with the relevant information for the recipient such as their name, address, and tax identification number.
C. Payment Amounts
Box 1: Rents. The total of any rental payments made to the contractor for whom you’re filing this form.
Box 2: Royalties. Any royalty payments from oil, gas, or mineral properties or intellectual properties made to the contactor.
Box 3: Other Income. Any miscellaneous income that does not fit in any other designated box, such as prizes or awards.
Box 4: Federal Income Tax Withheld. Amount of federal income tax withheld from contractor, if any.
Box 5: Fishing Boat Proceeds. Any money paid to a fishing boat contractor.
Box 6: Medical and Health Care Payments. Any medical or health care benefits paid for the contractor.
Box 7: Payer made direct sales totaling $5000 or more of consumer products to recipient for sale.
Box 8: Substitute Payments in Lieu of Dividends or Interest.
Box 9: Crop Insurance Proceeds. Payments to farmers from crop insurance coverage from the insurance company.
Box 10: Gross Proceeds Paid to an Attorney.
Box 11: Fish purchased for resale.
Box 12: Section 409A deferrals
Box 13: Excess Golden Parachute Payments. The total amount paid to an employee who has left the company.
Box 15-17: State Income Tax Information. Information regarding state income and withholding.
Need more information?
For more information on filing Forms 1099-MISC, please see our other blog posts:
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BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.