IRS FORM 1099 REPORTING WHAT PAYMENTS TO REPORT

IRS FORM 1099 REPORTING: WHAT PAYMENTS TO REPORT

FORM 1099 -MISC WHAT PAYMENTS TO REPORT Report payments for the following: 1) At least $10 in royalties 2) At least $600 in rents, services, prizes and awards, and medical and health care payments* *Ex: employer payments for free screenings, blood pressure exams, flu shots, etc. 3) Fishing boat proceeds 4) Gross proceeds of $600 or more paid to an attorney 5) Payments of Directors' fees (e. g. , Board of Directors' fees)

FORM 1099 -MISC WHAT PAYMENTS TO REPORT WHAT NOT TO REPORT 1. Payments to a corporation 2. Payments for merchandise, freight, storage, and similar items 3. Wages paid to employees 4. Business travel allowances 5. Cost of current life insurance protection

FORM 1099 -MISC WHAT PAYMENTS TO REPORT TRADE OR BUSINESS REPORTING ONLY your "Report on Form 1099 -MISC only when payments are made in the course of trade or business. " You are engaged in a trade or business if you operate for gain or profit. Also includes non-profits and other organizations subject to reporting requirements like trusts, qualified pensions, or profit-sharing plans

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 3 - OTHER INCOME B. Spector Vikings Supporters Co. 233 Minneapolis Drive Minneapolis, MN 55402 J. Doe 111 Greenwood Milwaukee, WI 53201 600. 00

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 3 - OTHER INCOME Examples: 1. Payments of deceased employee's wages 2. Payment or a series of payments, made to individuals for participating in a medical research study 3. Termination payment to former self-employed insurance salespeople 4. All punitive dames, any damages for non-physical injuries or sickness, and any other taxable damages

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 7 - NONEMPLOYEE COMPENSATION B. Spector Vikings Supporters Co. 233 Minneapolis Drive Minneapolis, MN 55402 J. Doe 111 Boo Packers Drive Milwaukee, WI 53201 600. 00

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 7 - NONEMPLOYEE COMPENSATION If the following four conditions are met, must generally report a payment as "Nonemployee Compensation" in Box 7: Made the payment to someone who is not an employee Made the payment for services in the course of the payor's trade or business Made the payment to an individual, estate, or partnership THE AMOUNT OF PAYMENT TO THE PAYEE IS AT LEAST $600 Generally, amounts reportable in Box 7 are subject to self-employment tax (20% most often – the payee pays this tax)

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 7 - NONEMPLOYEE COMPENSATION 1)Professional service fees such as attorneys' fees, accountants' fees, architects' fees, contractors' fees, etc. 2)Fees paid by one professional to another, such as fee-splitting or referral fees 3)Commissions paid to nonemployee salespersons 4)Travel reimbursement paid to an independent contractor who did not account for the expense, if the amount is above $600

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 7 - NONEMPLOYEE COMPENSATION Golden Parachute Payments are reportable as Nonemployee Compensation To qualify as a "Golden Parachute Payment, " the payment must meet the following requirements: 1)Payment is in the nature of compensation 2)Payment is to, or for the benefit of, a "disqualified individual" 3)Payment is contingent on a change in the ownership of a corporation, effective control of a corporation, or a substantial portion of the assets of a corporation, and 4)The payment has an aggregate present value of at least three time the individual's base salary

FORM 1099 -MISC WHAT PAYMENTS TO REPORT BOX 7 - NONEMPLOYEE COMPENSATION Golden Parachute Payments are reportable as Nonemployee Compensation A "disqualified individual" (i. e. , one who is not eligible to receive a golden parachute payment) is one who at any time during the 12 -month period prior to, and ending on, the date of the change in ownership or control was, (1) an employee or independent contractor, and (2) was (if in regard to a corporation) a shareholder, an officer, or a highly compensated individual