01/24/2024
From Instr. for Forms 1099-MISC and 1099-NEC (Rev. 01-2024)
File Form 1099-NEC, Nonemployee Compensation, for each person during your business to whom you have paid the following during the year.
• At least $600 in:
1. Services performed by someone who is not your employee (including parts and materials) (box 1).
2. Payments to an attorney (box 1).
Exceptions
Some payments do not have to be reported on Form 1099-NEC, although they may be taxable to the recipient.
Payments for which a Form 1099-NEC is not required include all the following.
•Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation).
•Payments for merchandise, telegrams, telephone, freight, storage, and equivalent items.
•Payments of rent to real estate agents or property managers. However, the real estate agent or property manager must use Form 1099-MISC to report the rent paid to the property owner. See Regulations section 1.6041-3(d); Regulations section 1.6041-1(e)(5), Example 5; and the instructions for box 1.
•Form 1099-K. Payments are made with a credit card or payment card and certain other types of payments.
Conclusion:
Needs 1099
– LLC that is not treated as a C or S corporation (that is why your bookkeeper needs their W9 to check if they are exempt).
– Rent paid to the property owner.
– Payments to an attorney.
– You made the payment to someone who is not your employee.
– You made the payment for services during your trade or business (including government agencies and nonprofit organizations).
– You made the payment to an individual, partnership, estate, or a corporation.
– You made payments to the payee of at least $600 during the year, not just contractors directly related to your business/sales.
Patricia de Oliveira
Bookkeeper Professional
508-221-1874
Maple Bookkeeping Services
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