Information Returns

If you make or receive payments in your business, you may have to report them to the IRS on information returns.  The IRS compares the payments shown on the information returns with each person’s income tax return to see if the payments were included in income.  You must give a copy of each information return you are required to file to the recipient or payer.  In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions.

Form 1099-MISC

Use Form 1090-MISC, Miscellaneous Income, to report certain payments you make in your business.  These payments include the following items.

w      Payments of $600 or more for services performed for your business by people not treated as your employees, such fees to subcontractors, attorneys, accountants, or directors.

w      Rent payments of $600 or more, other than rents paid to real estate agents.

w      Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows.

w      Royalty payments of $10 or more.

w      Payments to certain crewmembers by operators of fishing boats.

You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment.