Managing Your 1099-MISC Deadline

The so-called ‘gig’ economy enabled millions of individuals to supplement their regular income or to get started as independent entrepreneurs. It also made workforce management exceptionally flexible for employers. Employers, though, have an added incentive to hire freelancers. Working with freelancers allows businesses to reduce their tax liability. However, engaging non-employee workers still comes with tax-reporting considerations. One of the most important is managing your 1099-MISC deadline.

The IRS requires businesses hiring non-employees to report payments made to them on form 1099-MISC. Payments to non-employees are reportable in box 7 of form 1099-MISC. The reported amount should include all payments to the individual who performed services for your trade or business. Additional types of payments reportable in box 7 include fees, commissions, prizes and awards for services performed as a nonemployee.

If the sum of all payments made to the non-employee is equal to or greater than $600, the deadline to file your 1099-MISC is January 31. The deadline is extended to the following Monday if the due date falls on a weekend.

The IRS allows payers to file their 1099-MISC forms either by paper procedures or through e-filing. Be sure to file a separate 1099 for each non-employee who received $600 or more from you.

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There is More Than One 1099-MISC Deadline

Form 1099-MISC is used to report several payment types to individuals in addition to non-employee compensation. For example, Payers report royalty payments of at least $10 in box 2. Other payment types reported on 1099-MISC include:

    • – Rents – box 1
    • – Prizes and awards (other than for non-employees) and other income payments – box 3
    • – Medical and health care payments – box 6
    • – Crop insurance proceeds – box 10
    • – Cash paid from a notional principal contract – box 3
    • – Payments to an attorney – box 14
    • – Fishing boat proceeds – box 5
    • – Direct sales of at least $5,000 of consumer products to a buyer for resale – box 9

If using form 1099-MISC to report any of the above payments to individuals, the filing date is February 28 when filing by paper means. However, when e-filing, the date is April 2.