Who Should Receive a 1099 Form?
- Independent Contractors and Freelancers
- Send a Form 1099-NEC (Nonemployee Compensation) to anyone who provided services (not goods) to your business and was paid $600 or more during the tax year.
- This applies to individuals, sole proprietors, partnerships, and LLCs, but not to corporations (unless specific rules apply).
Examples:
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- Freelance designers, writers, or developers
- Consultants, accountants, or marketing specialists
- Contractors like landscapers, plumbers, or maintenance workers
- Rent Payments
- If you paid $600 or more in rent to a landlord who is not a corporation, you must send a Form 1099-MISC.
- Legal Services
- Payments to attorneys for legal services must be reported on Form 1099-NEC or 1099-MISC, even if the attorney is a corporation.
- Other Income Payments
- If you paid someone $600 or more for prizes, awards, or other income not related to wages, you should issue a Form 1099-MISC.
- Interest and Dividends
- Financial institutions and businesses that pay out interest (Form 1099-INT) or dividends (Form 1099-DIV) send these forms. This typically applies to lenders or investment-related entities.
