Forms 1098 and 1099 are information reports, which must be filed with the Internal Revenue Service. These report amounts paid by you in the course of your trade or business to certain recipients. The type of payment made determines the form required.
Download the relevant documents related to information reporting by clicking the items below:
Relevant Federal Items
Relevant Washington State Items
The PATH Act, P.L. 114-113, Div. Q, sec. 201, requires Form 1099 that includes nonemployee compensation (NEC) to be filed on or before January 31, 2021 and eliminated the automatic 30-day extension for forms that include NEC. Beginning with tax year 2020, use Form 1099-NEC to report nonemployee compensation.
*Failure to file accurate and timely information returns could result in penalties from $50 to $530 per form.
Reporting requirements fall into three major categories:
Due to the creation of Form 1099-NEC, the IRS 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.
File Form 1099-MISC, Miscellaneous Income, for each person in the course of your business to whom you have paid the following during the year:
Available to download below is a detailed list of all Forms 1099 and other information returns that are required to be filed for 2019. The list includes minimum amounts requiring reporting, and the dates forms are due to the IRS and to the recipient. A copy of the instructions and forms may be obtained at the IRS’s website www.irs.gov. Search for specific form instructions and refer to General Instructions for Certain Information Returns, Page 20.
A major question that has been raised in the past is how to treat payments to a person who is providing both service and assets, e.g. an electrician installing an air conditioner. Even though the bill may segregate the price of the installation from the price of the air conditioner, it is considered safest to report the gross amount with any other payments on Form 1099.
Many of our clients have become very familiar with the use of Forms 1099 in reporting amounts that they pay to subcontractors. Please remember that a subcontractor must be a bona fide business. You must be certain that the individual qualifies as an independent contractor for both state and Federal purposes.
Taxpayers filing a Form 1065 (Schedule B, 18 a/b), Form 1120 (Schedule K, 15 a/b), Form 1120S (Schedule B, 10 a/b), Form 1040 (Schedule C, Lines I and J) and Form 1040 (Schedule F, Lines F and G) will be required to positively affirm that all required Forms 1099 have been filed.