Form 1099-MISC | TaxConnections

20 Apr 2023

IRS Issues Frequently Asked Questions About Compensation Payment Made By States For Forced Sterilization

This Fact Sheet is about frequently asked questions that address the federal income tax consequences of compensation payments for forced sterilization.

These frequently asked questions (FAQs) are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer’s specific facts and circumstances, and they may be updated or modified upon further review. Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability. Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so.

More information about reliance is available. These FAQs were announced in IR 2023-81.

Frequently asked questions about compensation payments made by states for forced sterilization

Background
The Department of the Treasury and the Internal Revenue Service (IRS) understand that some states have enacted legislation to compensate victims of forced, involuntary, or coerced sterilization under state programs. These states have made payments to those victims pursuant to the legislation (compensation payments for forced sterilization).
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Written by TaxConnections Admin | Posted in Forced Sterilization And Taxes

15 Jan 2021

Businesses Have Feb. 1 Deadline To Provide Forms 1099-MISC And 1099-NEC To Recipients

The Internal Revenue Service reminds businesses and other payors that the revised Form 1099-MISC, Miscellaneous Income PDF, and the new Form 1099-NEC, Nonemployee Compensation PDF, must be furnished to most recipients by February 1, 2021.

Redesigned Form 1099-MISC

The IRS revised Form 1099-MISC for the 2020 tax year to accommodate the creation of a new Form 1099-NEC. The redesigned 1099-MISC has different box numbers for reporting certain income. Businesses must send Form 1099-MISC to recipients by February 1, 2021, and file it with the IRS by March 1 (March 31 if filing electronically).

If businesses are using Forms 1099-MISC to report amounts in box 8, Substitute Payments in Lieu of Dividends or Interest, or box 10, Gross Proceeds Paid to An Attorney, there is an exception to the normal due date. Those forms are due to recipients by February 16, 2021.

Written by IRS | Posted in Form 1099-MISC • Form 1099-NEC

31 Jan 2017

IRS Form 1099-misc Due Date Approaching – Facts

As many of us who hang our own shingle are painfully aware, IRS Form 1099-misc is due NEXT WEEK. YIKES! I’m still shaking off the holidays.

The failure to timely file this ‘informational return’ has gone up this year. So you really do NOT want to miss this deadline, particularly if you are a contractor that needs to get 50 or so of these out.

Written by John Dundon | Posted in Tax Forms

16 Jan 2015

IRS Form 1099-Misc Filing Requirements Defined As Per IRC 6041

I was talking with a taxpayer the other day who registered as an LLC with Colorado Secretary of State. She developed an intriguing business model that is doing remarkably well according to the financial statement. As part of a tax planning conversation our discussion surrounding gross receipts digressed into how the billing function works. Interestingly enough the response caused my jaw to drop.

After pressing further in my quest for knowledge, turns out services were ultimately bid out using a decision support system basically attempting to identify the likelihood as to whether the ‘customer’ would issue IRS Form 1099-misc or not. YIKES!

Knowing this person to be fundamentally good yet previously misguided I informed her Read More

Written by John Dundon | Posted in IRS

23 Dec 2014

Mysterious Form 1099-MISC- Unveiled!

My first interesting encounter with the Form 1099-MISC was many, many years ago when I worked with a big box tax prep company. A guy walked in with literally a shoe-box full of these forms all made out to him under his Social Security Number. We spent quite a huge chunk of time getting through those but boy did I learn fast on the ins & outs of this mysterious form!

What is Form 1099-MISC?:

Form 1099-MISC, Miscellaneous Income, is issued to a person if any of the following situations occur, when a trade or business or some other qualified organization pays:

• If at least $10 in royalties or broker payments are paid to a person Read More

Written by Manasa Nadig | Posted in Income Tax • Individual

20 Nov 2014

5 Payroll Tax Mistakes To Avoid

If you have at least one employee, you are responsible for payroll taxes. These include withholding federal (and, where appropriate, state) income taxes and FICA tax from employees’ wages as well as paying the employer share of FICA tax and federal and state unemployment taxes. The responsibility is great and the penalties for missteps make it essential that you do things right.

1. Misclassifying workers

Perhaps the hottest audit issue today is misclassifying workers. There’s incentive to treat workers as independent contractors rather than employees because payroll taxes and employee benefit costs are high; a company’s only tax responsibility for an independent is Read More

Written by Advertorial | Posted in Small Business • Tax Tips

09 Oct 2013

Independent Contractor Versus Employee?

Is it better to be an independent contractor or an employee? For a small business owner (SBO), the question mostly is, how to determine what business relationship exists between the person providing the services & the SBO; and if that relationship is that of an independent contractor or an employee.

So how is that determination made?

Common Law Rules fall into 3 categories. Behavioral: Does the company have the right to control what the worker does & how he does it?; Financial: Are the business aspects of the worker’s job controlled by the payer?; And the Type of Relationship: Are there written contracts or employee type benefits?

•The general rule of thumb is that one is an independent contractor if the payer (of the fees) has the right to control or direct only the result of the work and not what will be done and how it will be done.

•Hence you are not an independent contractor if you perform services that can be controlled by an employer (what will be done & how it will be done). You may have freedom of action but the employer has the legal right to the details of how the services will be performed.

An independent contractor is considered self-employed and employee is not. Read More