1099 Msc Case Study

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The New Year brings new IRS reporting requirements for companies both large and small. The new change in the filing deadlines for the submission of Form 1099-MISC is a detail companies need to be aware of.

What is Form 1099-MISC?

The 1099- MISC (for miscellaneous) is a form for reporting a variety of income sources to the Internal Revenue Service (IRS.) This includes payments, royalties, and commissions. For most companies, the primary reason for using the form is to report nonemployee compensation. Any compensation for work done by independent contractors, freelancers, and consultants has to be reported to the IRS. The 1099-MISC is for annual reporting of payments made to nonemployees. The form is sent to each payee and to the IRS for the previous year's income. …show more content…
Each part or page copy has a different destination. For example, Copy A is for the IRS, Copy B is for the nonemployee, and Copy C is retained by the company or payer. There is also Copy 1 sent to the state's tax department and Copy 2 sent to the nonemployee for use with state income tax returns.

Who Gets a 1099-Form?

Companies have to prepare the 1099-MISC and transmit it to the IRS if it made payments of more than $600 in income or more than $10 in royalties to a nonemployee. The companies also have to send each nonemployee a copy of the same 1099-MISC form. The 1099-MISC covers several different types of nonemployee compensation. The payment types include the following:
· independent contractor earnings
· commissions
· royalties
·
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1099 Msc Case Study

Service) requires all companies to send a 1099-MISC form to all nonemployees who received payments for freelance or independent contractor work during the prior year. The IRS also mandates that a copy of the 1099-MISC also be sent to the federal tax agency. The Pennsylvania Act 85 of 2012 now requires that companies send a copy of the 1099-MISC to the Pennsylvania Department of Revenue as well. The Reason for the Change The IRS wants copies of the 1099-MISC so it can compare the information provided…

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