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If the person you paid to do work for your business is not considered an employee, you may have to file a Form 1099.

Per the IRS Am I Required to File a Form 1099 or Other Information Return? webpage:

Made a Payment

If, as part of your trade or business, you made any of the following types of payments, use the link to be directed to information on filing the appropriate information return.

  • For each person to whom you have paid at least $600 for the following during the year (Form 1099-MISC):
    • Services performed by someone who is not your employee (including parts and materials)
    • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
    • Payments to attorneys (including law firms or other providers of legal services)

Note: You must also file Form 1099-NEC for each person from whom you withheld any federal income tax (Box 4) under the backup withholding rules regardless of the amount of the payment.

  • For each person to whom you have paid the following during the year (Form 1099-MISC):
    • Rents (Box 1)
    • Royalties (Box 2)
    • Other income (Box 3), including prizes and awards
    • Federal income tax withheld (Box 4), including backup withholding
    • Fishing boat proceeds (Box 5)
    • Medical and health care services (Box 6)
    • Substitute payments in lieu of dividends or interest (Box 8)
    • Crop insurance proceeds (Box 9)
    • Gross proceeds paid to an attorney, for example in a settlement agreement (Box 10, but payments to attorneys for services are reported on Form 1099-NEC)
    • Fish purchased for resale (Box 11)
    • Section 409A deferrals (Box 12)
    • Excess golden parachute payments (Box 13)
    • Nonqualified deferred compensation (Box 14)

Note: It is important that you place the payment in the proper box on the form. Refer to the instructions for more information.

  • Interest on a business debt to someone (excluding interest on an obligation issued by an individual) (Form 1099-INT)
  • Dividends or other distributions to a company shareholder (Form 1099-DIV)
  • Distribution from a retirement or profit plan or from an IRA or insurance contract (Form 1099-R)
  • Payments to merchants or other entities in settlement of reportable payment transactions, that is, any payment card or third party network transaction (Form 1099-K)

Not Required to File Information Returns

You are not required to file information return(s) if any of the following situations apply:

  • You are not engaged in a trade or business.
  • You are engaged in a trade or business and
    • the payment was made to another business that is incorporated, but was not for medical or legal services or
    • the sum of all payments made to the person or unincorporated business is less than $600 in one tax year

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.

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