Tax: Form 1099-Misc – Free Forms/Instructions
Be 1099 Ready, order ahead and get your 2012 forms for free
Year-end is fast approaching and among the tasks to be prepared for are the filing of 1099-MISC forms. Although the reporting deadline has been extended until mid-February, now is the time to order forms (free from the IRS starting 12/1/2012.) It is also the time to review your 2012 payments to confirm that you have properly qualified all 1099. Throughout the year we recommend that you obtain a vendor Tax ID Form W9 (www.irs.gov/pub/irs-pdf/fw9.pdf ) for all new vendors before any payments are released to the new vendor.
It is quick, easy and FREE to order forms at: http://www.irs.gov/businesses/page/0,,id=23108,00.html . We recommend you order 4 1096 forms and 2-3 times the number of 1099-MISC forms as you think you’ll need (to allow for misprints, amendments, etc.).
Forms order list:
To brush up on what kind of vendors and payments should be reported on 1099 forms, print off the relevant instructions from: http://www.irs.gov/instructions/i1099msc/ar02.html
Extract from IRS Instructions related to services from non-employees:
Enter nonemployee compensation of $600 or more. Include fees, commissions, prizes and awards for services performed as a nonemployee, other forms of compensation for services performed for your trade or business by an individual who is not your employee. Also include expenses incurred for the use of an entertainment facility that you treat as compensation to a nonemployee. Federal executive agencies that make payments to vendors for services, including payments to corporations, must report the payments in this box. See Rev. Rul. 2003-66, which is on page 1115 of Internal Revenue Bulletin 2003-26 at www.irs.gov/pub/irs-irbs/irb03-26.pdf.
What is nonemployee compensation? If the following four conditions are met, you must generally report a payment as nonemployee compensation.
- You made the payment to someone who is not your employee;
- You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
- You made the payment to an individual, partnership, estate, or, in some cases, a corporation; and
- You made payments to the payee of at least $600 during the year.
Self-employment tax. Generally, amounts reportable in box 7 are subject to self-employment tax. If payments to individuals are not subject to this tax and are not reportable elsewhere on Form 1099-MISC, report the payments in box 3. However, report section 530 (of the Revenue Act of 1978) worker payments in box 7.
Examples. The following are some examples of payments to be reported in box 7.
- Professional service fees, such as fees to attorneys (including corporations), accountants, architects, contractors, engineers, etc.
- Fees paid by one professional to another, such as fee-splitting or referral fees.
- Payments by attorneys to witnesses or experts in legal adjudication.
- Payment for services, including payment for parts or materials used to perform the services if supplying the parts or materials was incidental to providing the service. For example, report the total insurance company payments to an auto repair shop under a repair contract showing an amount for labor and another amount for parts, if furnishing parts was incidental to repairing the auto.
- Commissions paid to nonemployee salespersons that are subject to repayment but not repaid during the calendar year.
- A fee paid to a nonemployee, including an independent contractor, or travel reimbursement for which the nonemployee did not account to the payer, if the fee and reimbursement total at least $600. To help you determine whether someone is an independent contractor or an employee, see Pub. 15-A.
- Exchanges of services between individuals in the course of their trades or businesses. For example, an attorney represents a painter for nonpayment of business debts in exchange for the painting of the attorney’s law offices. The amount reportable by each on Form 1099-MISC is the FMV of his or her own services performed. However, if the attorney represents the painter in a divorce proceeding, this is an activity that is unrelated to the painter’s trade or business. The attorney must report on Form 1099-MISC the value of his or her services. But the painter need not report on Form 1099-MISC the value of painting the law offices because the work is in exchange for legal services that are separate from the painter’s business.
- Taxable fringe benefits for nonemployees. For information on the valuation of fringe benefits, see Pub. 15-B, Employer’s Tax Guide to Fringe Benefits.
Payments not reported in box 7.
Do not report in box 7, nor elsewhere on Form 1099-MISC, the cost of current life insurance protection (report on Form W-2 or Form 1099-R); an employee’s wages, travel or auto allowance, or bonuses (report on Form W-2); or the cost of group-term life insurance paid on behalf of a former employee (report on Form W-2).
Call Silicon Valley Accounting Solutions for help identifying vendors & services to report or if you need guidance on setting your 1099 preferences and/or preparing 1099′s in QuickBooks.