What Payments Need To Be Reported On Form 1099?

If you made or received a payment in a calendar year as a small business or self-employed individual, you most likely are required to file an information return (Form 1099) to the IRS.

If you engaged in certain financial transactions during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return to the IRS. Below is the most common type of transactions that you have to report.

Services performed by independent contractors — those not employed by your business.
Prizes and awards, as well as certain other payments — termed other income.
Rent.
Royalties.
Backup withholding or federal income tax withheld.
Payments to physicians, physicians’ corporation or other suppliers of health and medical services.
Substitute dividends or tax-exempt interest payments, and you are a broker.
Crop insurance proceeds.
Gross proceeds of $600 or more paid to an attorney.
Interest on a business debt to someone (excluding interest on an obligation issued by an individual.
Dividends and other distributions to a company shareholder.
Distribution from a retirement or profit plan, or from an IRA or insurance contract.
Payments to merchants or other entities in settlement of reportable payable transactions — any payment card or third-party network transaction.

Keep in mind that information is for businesses. Here are some situations where you may not need to file an Information Return:

You are not engaged in a trade or business.
The recipient of the payment is taxed as an S or a C Corporation
The sum of all payments made to the person or unincorporated business was less than $600 in one tax year.
Payments were made via credit card.

This is just an introduction to a complicated topic, and the mechanics of filing such a return are filled with essential details. If you're running a business, even a small one, be sure to discuss the details with a qualified professional.