Vendors, Expenses, and Accounts Payable
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      Do I need to file 1099s?

      Business may need to file 1099s for payments made during the year

      Any business in the US that makes payments is subject to reporting those payments on forms 1099 based on different circumstances. To be able to find out if you need to report forms 1099 you need to complete the following two (2) steps.

      Forms 1099 are generally only made for payments to US Resident Individual and Entities. Payments made to Non-Resident Individuals and Entities are not reported on forms 1099. See our article about Payments to Non-Resident Individuals and Entities.

      #1 Identifying Vendors

      Throughout the year the businesses administrative staff should collect forms W-9 every time they are going to make a Check, Cash, or bank transfer payment.

      Payments by Credit or Debit Card do not require collection of form W-9 since the payment processor will file a form 1099-K.

      Payments through services such as Zelle, Venmo and PayPal generally require collection of a form W-9.

      It is recommended that you collect these forms prior to making any payment. This simplifies form 1099 preparation at the beginning of the year. 

      #2 Identifying Payments

      There are many types of payments that get reported on forms 1099. Here we will include the most common types of payments to report.

      • Payments of $600 or more, for services and products to Individuals, Contractors, Sole-Proprietors or Single-Member LLCs (SMLLC) are reported on 1099-NEC. Due: Jan 31st
      • Payments of $600 or more, to Attorneys for legal services are reported on 1099-MISC. Due: Paper- Feb 15th / E-File- Mar 31st
      • Payments of $10 or more for Interest are reported on 1099-INT. Due: Paper- Feb 15th / E-File- Mar 31st
      • Payments of $10 or more for Dividends are reported on 1099-DIV. Due: Paper- Feb 15th / E-File- Mar 31st

      Though not common, a vendor can receive multiple different 1099s or a 1099 with information in various boxes from the same paying business.

      Payments to Employees outside of Payroll

      Generally, an employee of a business that receives a Form W-2 should not receive a 1099-NEC. The only payments made to employees outside of payroll should be for reimbursement of expenses incurred. Payments for commissions, bonus, overtime, stipends, advances, etc., should be made through your payroll provider.