Tax Tip #226

Businesses, business owners and payments to certain individuals require a 1099 to be issued and filed with the IRS & in some states. 

Some key points to know: 

• Payments of $600 or more to non-employee individuals, partnerships, physicians and all attorneys are reportable on Form 1099-NEC.
• Payments to corporations are typically not reported, unless to an attorney.
• The recipient should complete a Form W9 in order to complete Form 1099. The W9 form can be found on the IRS website. 
• College athletes who receive Name, Imagine and Likeness (NIL) income will also owe self-employment tax on net earnings.
• Penalties: Range from $60 to $330 per return or statement (per 1099).
• Form 1099 needs to be provided to the recipient by 1/31. 

If you have questions, please reach out to a team member for assistance.