Form 1099-misc
IRS Form 1099 is required to report payments to people and businesses you do business with, especially subcontractors. If the business you make payments to is a corporation you are not required to file a 1099, only unincorporated business must get a 1099 (with a few exceptions listed below).
The IRS requires that the 1099 be in the hands of the recipient by Jan 31 of the following year. (my suggestion is to order the forms early!) You have until Feb. 28 to get the forms to the IRS itself.
The who and how much varies though (get the directions for Form 1099 to see the whole gamut of reasons to file), some of the most common reasons are:
If the business pays subcontractors or others providing services - $600 or more (box 7).
If the business pays Rents and Commissions - $600 or more (box 1).
the exceptions:
Payments made to all providers of medical and health care services of at least $600 must be reported regardless of whether the recipient is a professional corporation (box 6).
All payments to attorneys must be reported regardless of whether the recipient is a professional corporation (box 14).
Note that the first item (box 7) also includes the value of any barter transaction. If you pay for a service by giving something from the business (inventory, professional services, etc) the fair market value of that item or service is taxable income to the person you traded with.
In QB, when you bring up the vendor edit screen there are two tabs, on the “Additional Info” tab there is a check mark box saying “Vendor is eligible for 1099″ mark that box and QB will keep track of the payments to that vendor for the purpose of filling in a Form 1099. You can get a report by using the menu Reports>Vendors & Payables>1099. I would think it would be under the menu item “Accountants & Taxes” but it isn’t.
