Tax season will begin soon, which means it’s time to start issuing tax forms to employees, independent contractors, and vendors. A 1099 is a tax form that describes wages paid to someone not by their employer, and must be issued by January 31. Who should you send a 1099 to this tax season? A basic rule of thumb is to issue a 1099 to anyone you paid over $600 throughout the year, but follow our flow chart for guidance.
Below is a decision-making tool to help you decide if you should send a 1099. Follow the bolded questions, choose between the options given, and follow the arrows until you find your answer.
WHAT DID YOU PAY THE VENDOR FOR?
Rent → Did you pay over $600?
Services → Did you pay over $600?
Royalties → Did you pay over $10?
Did you pay an attorney?