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Are you Keeping up with your Reportable 1099 Payments?

Apart from the typical non-employee, individual whom you consider a subcontractor, are you aware of everyone who is in need of a 1099-Misc come January 31st of the subsequent year? The best practice you can do for yourself (and your accountant!) is to keep up with your W-9 collections throughout the year.

A few basic reminders:

  • 1099s are due to vendors paid in total of $600 or more in the calendar year for services
  • If a vendor is incorporated or tax-exempt, no 1099 is provided. Except for Lawyers! All legal fees of $600 or more are to be reported on a 1099, despite incorporation status. If you are unsure of a vendor’s legal structure – request a W-9 to be sure
  • Common reportable payments
  • Rental Fees (including banquet rooms, building space, etc.)
  • Copyright, license and royalty fees
  • Compensation for personal and/or professional “services” (including parts & materials used in performing services)
  • Payments to the beneficiary of a deceased employee
  • Legal services
  • Catering
  • Merchandise that is custom-made
  • Advertising (where the ads are created by the vendor)

AND MORE!

Can we get some exceptions here?

  • Pay vendors by credit card – credit card revenues are already reported to the IRS on form 1099-K by the credit card company so payments to vendors via credit card are non-reportable on form 1099 by you!
  • Foreign vendors – you do not need to provide 1099s to foreign vendors, however, best practice would involve having them fill out a W-8BEN for your records

If you are planning on taking on your 1099 preparation yourself – contact Samantha Wolf at swolf@stephanoslack.com for a one-page cheat sheet! If you would like Stephano Slack to handle your 1099 preparation, please contact Samantha Wolf no later than December 1st, 2017!

Samantha Wolf, CPA

swolf@stephanoslack.com

610-687-1600

November 7, 2017