Form W-9, Request for Taxpayer ID and Forms 1099-MISC and 1099-NEC

It is almost time to submit your 1099 forms.

Contractors marked to track for 1099 and have payments that meet the following requirements:

Payments were made by cash, check, direct deposit, or another custom payment method that was not marked in QuickBooks as a credit card. 

Payments meet the IRS threshold for the 1099 box that you assigned them in the mapping window (the Select accounts screen). In most cases, this payment threshold is $600 or more.

See: Reporting payments to independent contractors | Internal Revenue Service

You must send a 1099-NEC form to anyone you paid at least $600 during the tax year for services performed as a nonemployee. Here’s a breakdown of the criteria:

You must file a 1099-NEC for payments made to:

• Independent contractors or other nonemployees for services (not goods).

• Sole proprietors, partnerships, or single-member LLCs that provided services.

• Attorneys (lawyers) for legal services, even if the payment is less than $600.

• Nonemployees whom you paid via cash, check, or direct deposit (not through credit cards or third-party networks like PayPal).

You don’t need to file a 1099-NEC for:

• Payments made to C corporations or S corporations, unless for specific services like legal or medical.

• Payments for materials or products (only for services rendered).

• Payments made via a third-party payment processor (e.g., PayPal, Venmo) if those processors are responsible for filing a 1099-K instead.

A 1099-MISC form is used to report miscellaneous income, other than nonemployee compensation (which is reported on the 1099-NEC). Here's a guide to who needs to receive a 1099-MISC:

You must file a 1099-MISC for payments made to:

1. Rents:

   • Payments of $600 or more for office space, equipment rentals, or other types of rent.

2. Prizes and Awards:

   • $600 or more in cash or the fair market value of noncash items awarded.

3. Medical and Healthcare Payments:

   • Payments of $600 or more to doctors, clinics, or other providers for medical or health services (regardless of entity type, including corporations).

4. Royalties:

   • Payments of $10 or more for royalties.

5. Attorney Payments:

   • Gross payments of $600 or more to attorneys (lawyers) for services not related to legal settlements or fees already reported on a 1099-NEC.

6. Fishing Boat Proceeds:

   • Payments related to fishing boat operations.

7. Other Income:

   • Miscellaneous income payments of $600 or more that don’t fit into another category.

You don’t need to file a 1099-MISC for:

1. Payments made to C corporations or S corporations, unless related to medical/healthcare payments or legal fees.

2. Personal expenses or payments (not related to your trade or business).

3. Payments made via credit card or third-party processors (covered under 1099-K).

Deadline for Sending the 1099-MISC and 1099-NEC:

Filing 1099-MISC and 1099-NEC and processing forms in QuickBooks Online:

You’ll have the option to print and mail the forms or file through QuickBooks Online with the IRS and send digital and paper copies to your contractors and vendors.

• January 1 – May 6: Online filing is available

• January 15: Last day for early bird discount

• January 28 at 5 PM PST: Last day to send taxpayer copies on time

• January 31 (electronically or via mail) to the IRS

  IRS Section 6071(c) requires you to:

• File Form 1099-NEC on or before January 31, using either paper or electronic filing procedures.

• File Form 1099-MISC by February 28, if you file on paper, or March 31, if you file electronically.

Contact any vendors missing email addresses and Tax ID number as soon as possible. An email address will allow you to send a request for W9 information from the payroll > Contractor Menu

Instructions and Forms 1099-MISC and 1099-NEC https://www.irs.gov/instructions/i1099mec

W9 Instructions: https://www.irs.gov/forms-pubs/about-form-w-9

*Contact BookkeepingBusinessOnline.com for assistance.

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