Before you begin preparing your Form 1099-MISC reporting, it is important that you know what information you need to gather. This step-by-step guide identifies 5 key topics that will help you correctly and timely file your Form 1099-MISC.
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.
Forms 1099-MISC are completed for non-employees who have, in the reporting year, been paid by the reporting company for rents, royalties, prizes and awards, and substitute payments in lieu of dividends.
The information needed for preparing Form 1099-MISC includes the taxpayer names, addresses, and identification numbers for the reporting company (“payer”) and the recipient (“payee”), as well as the amounts paid to the recipient.
It is important that you take the time to review the information you are reporting on your Forms 1099-MISC for accuracy before distributing and filing, including the payment amounts and taxpayer information. This will minimize the risk of incurring penalties and fines.
The IRS and recipient each require copies of the 1099-MISC form, as well as some state tax departments.
All recipient copies of Form 1099-MISC must be distributed by February 1, 2021.
Forms 1099-MISC with NEC reporting must be submitted to the IRS by February 1, 2021. All other Forms 1099-MISC must be submitted on paper by March 1, 2021, or electronically by March 31, 2021.
Please note that you must file electronically if you have over 250 Forms 1099-MISC to report for Tax Year 2020.
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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.