Who receives a 1099's?

Usually, anyone who was paid $600 or more in non-employment income should receive a 1099. However, there are many types of 1099s for different situations. Also, there are many exceptions to the $600 rule, meaning you may receive a 1099 even if you were paid less than $600 in non-employment income during the tax year. Know the IRS common laws.

How do I know?

Determine what type of relationship you have with a person or company to decide if you need to issue a 1099 to document the relationship, best way to do that is to request a W-9.

Then compile a financial report on any B2B services you paid more than $600 for the current calendar year. There are several factors, it is critical that business owners correctly determine whether the individuals or businesses providing services are in need of a 1099. If a business fails to issue a form by the January 31 deadline, the penalty varies, depending on how long past the deadline the business issues the form. We would hate to see this happen for you. Best practice going forward: DO NOT remit payment without first obtaining a W-9 form.