If required, the filing of 1099 forms is not optional. The IRS specifically asks on your business return if your business had qualifying recipients and if the forms were filed. Generally, a form 1099 is required for annual payments greater than $600 for non-employee compensation, rents, and legal fees. A 1099-NEC will be the most common form used.

Many factors go into determining if a 1099 is required, including:

1) How much a contractor was paid in a year.

2) How the contractor was paid. Payments made via credit card, stripe/square and in some cases Paypal and Venmo are not included on Form 1099.

3) Type of business. If the contractor is incorporated or an S-Corporation, a 1099 is not required.

Keeping accurate records is essential in determining who will need to be issued a Form 1099. At Tidy Books, we can guide you through this process to help determine qualified recipients and file the appropriate 1099 forms. Questions? Contact us at office@tidybooksboutique.com.