top of page
Business & Self Employed - Background(2).png
Businesses &
Self-Employed
Corporation
Deducting Business Expense
Sole Prop
S Corp
Partnership
EIN
Opportunity Zone
LLC
International Business
Credit & Deduction
1099

Assistant

Do you need to file a 1099? Use this guide to find out.

1099 Assistant
What is a 1099?

Form 1099 is an information tax return used to report certain payments made to certain individuals and businesses to the IRS

Form 1099 should be filed only when payments are made in the course of your trade or business. Personal payments are not reportable.

  • 1099 - MISC

In general, you should file Form 1099-MISC for each person in the course of your business for whom you have paid at least $600 for the following during the year: Rents, prizes and awards, and other income payments. (see Instructions for Form 1099-MISC for a list of all payments types that require a Form 1099-MISC)

 

  • 1099 - NEC

In general, you should file Form 1099-NEC for each person in the course of your business for whom you have paid at least $600 as nonemployee compensation. Nonemployee compensation are payments made to independent contractors, freelancers, sole proprietors, and self-employed individuals.

Should you file a 1099?
Cash

Apps

Paying Vendors via Cash Apps - What You Need to Know

New IRS Income Reporting Requirements for Businesses, Banks, and PSEs

The IRS has recently heightened income reporting requirements for businesses, banks, and third-party settlement organizations (also known as PSEs) to enhance voluntary tax compliance and improve tax collections. Here's what you should know:

 

  • Businesses that make payments to vendors, suppliers, and non-employee contractors must issue Form 1099-MISC or Form 1099-NEC by January 31 of the following year if the total amount of payments exceed $600 for the calendar year. However, payments made to incorporated businesses are generally exempt from this reporting requirement.

  • Credit card payments made to vendors do not require a 1099 to be issued. This is because the credit card issuer is responsible for providing a 1099-K to the payee if the total amount of transactions exceeds $20,000 and 200 transactions, starting in 2023.

​

What About Cash Apps?

  • Cash apps such as Cash App, PayPal, Venmo, Zelle, and other PSEs are required to report all transactions on a 1099-K and send it directly to the payee if they exceed $20,000.

  • If your business uses these apps to make payments, and the amount exceeds $600 within a calendar year, you don't need to file a 1099-MISC or 1099-NEC. These payments will be included in the 1099-K issued by the PSEs directly to the recipient vendors.

  • However, not all third-party settlement organizations are subject to the 1099-K filing requirement, due to a loophole in the tax law. In this case, you would need to report the payments on a 1099-MISC or 1099-NEC. Please consult the PSE Table below for more information, or reach out to the third-party settlement organization directly.

Resources Quick Nav
bottom of page