Did you miss our Form 1099 webinar? Watch the recording here.
On January 6, 2021, Tax Senior Manager and CPA, Todd Gunn, and Accounting Services Senior, Bradley Patterson, hosted a live webinar on Form 1099 Preparation and Filing Requirements.
Todd and Bradley explored what payments need to be reported, who needs to be sent a 1099, the various types of Form 1099s to use for different payment types, and how to send a Form 1099. New and existing rules as well as penalties and how to mitigate penalties were also covered. Finally, Todd and Brad answered Form 1099 questions from participants.
Watch the recorded Form 1099 Preparation and Filing Requirements webinar here. Simply press Play in the bottom left corner once directed to the Zoom website to watch the entire webinar.
The Questions and Answers from the live Form 1099 webinar can be accessed found below and if you wish you save or print a PDF version, you can do so here.
We hope you find our webinar and the associated resources helpful in your company and team's efforts on correctly issuing and being in compliance with Form 1099 regulatory requirements.
We're here to help with additional questions or if need further assistance. Email us at firstname.lastname@example.org or call us at 904-396-5965.
Questions and Answers on Form 1099:
Types of Payments to Report on a Form 1099
Q1: How about lease and rental payments. We rented some equipment this past year which we let clients borrow free of charge. Are such payments for equipment rental required to have a Form 1099 issued for?
A1: Yes, equipment rentals are to be filed on a 1099-MISC, but the other rules, I.E. combined annual payments over $600 and vendor not taxed as a C or S corp, still apply.
Q2: Do we have to provide a 1099 for only sub-contractors who are not incorporated?
A2: 1099-NEC is to anyone whom you paid for services who is not taxed as a C or S Corp (Besides attorneys, this is the only situation you would file a 1099 for a corporation). If they are an LLC, you need the W-9 to know how they are treated for tax purposes to determine if they need a 1099.
Q3: We will be renting two storage units in 2021 that will be charged to our credit card each month. Therefore, do we not have to provide a 1099 since this is tied to our credit card?
A3: Correct. The same applies if the payments were made via PayPal or a similar provider. Both credit card providers and PayPal, etc. issue Form 1099-K for payments made.
Q4: Should the rule of thumb be "when in doubt, file a 1099-NEC"?
A4: Yes, it will not hurt the recipient to receive one, and if they do not believe they should have, they can always ask you to file a corrected 1099 for $0.
Q5: Instead of securing a hotel room for an employee, we paid him “rent” for his RV trailer while he worked out of town on a job for us. I assume I would send him a 1099-MISC even though he is also an employee?
A5: Yes, that is correct
Q6: Instead of renting hotel rooms for employees working on a long-term job outside Jacksonville, we rented a house from an individual. Unfortunately, we were unable to get a W-9 although we attempted multiple times. Should I still fill out Form 1099-MISC and send to the mailing address even if I do not have a EIN (social)?
A6: Yes, and you should file it with the IRS on paper and write “Refused” in the EIN/SSN box
Form W-9 Verificaition
Q7: What about vendors such as Salesforce, Constant Contact, web hosting companies etc. Do we need to do a W-9 verification and issue Form 1099s for those types of services?
A7: The question you have to answer first is are they providing a service? If you are just paying to use their software, then no. Also, many times larger companies may fall into the taxation categories that would not require a 1099 even if providing services.
Q8: Should I request a completed updated W-9 from my vendors every year?
A8: Yes, this is a good best practice. Vendors address information could change, taxation structure could change, etc.
Form 1099-MISC Filing Deadline
Q9: If I’m still waiting for one or more vendors to submit information, should our company go ahead and timely file those Form 1099s that we are able to?
A9: Yes. If this is for Form 1099-MISC, you should also file a 1099 extension with the IRS for the forms that can’t be filed on time. This will be the help avoid potential penalties. Form 1099-NEC is not able to be extended and is due 1/31.
Michael Todd Gunn | 01/07/2021