How to File a Form 1099-MISC Online
A clear guide to the Form 1099-MISC e-filing process, with a focus on proper preparation to ensure an accurate and compliant submission.
Form 1099-MISC, Miscellaneous Information, is an information return businesses use to report certain payments made during the year to the Internal Revenue Service (IRS).
Determining Your Filing Requirement
A business must file Form 1099-MISC for each person paid at least $600 during the year for payments like rent, prizes, and awards. The threshold for reporting royalties is lower, at $10 or more. Payments made to an attorney, such as gross proceeds from a settlement, are also reported on this form.
It is important to distinguish this form from Form 1099-NEC, Nonemployee Compensation, which is used for payments to independent contractors for services. This separation clarifies reporting and addresses different deadlines. Businesses filing 10 or more information returns of any type in aggregate must file them electronically.
Information and Documents to Prepare
Payer Information
You must have your business’s information readily available, including its legal name, mailing address, and nine-digit Taxpayer Identification Number (TIN). The TIN is your Employer Identification Number (EIN) and must match IRS records.
Recipient Information
You will also need complete information for each recipient, including their full name, mailing address, and TIN. A recipient’s TIN can be a Social Security Number (SSN) for an individual or an EIN for a business.
Gathering Recipient Information (Form W-9)
The standard method for collecting a recipient’s name, address, and TIN is by having them complete and sign IRS Form W-9, Request for Taxpayer Identification Number and Certification. Requesting a completed Form W-9 from any vendor or recipient before you issue the first payment ensures you have the necessary data when it is time to prepare your 1099s.
Payment Details
For each recipient, calculate the total reportable payments made during the calendar year. You must categorize these payments to enter them into the correct box on the form. For example, rental payments are entered in Box 1, and royalties are in Box 2. Any federal income tax withheld must also be reported.
Filing Deadlines
There are two primary deadlines for Form 1099-MISC. The first is furnishing the recipient with their copy (Copy B), which is due by January 31 of the year following payment. If the form includes payments to attorneys, this deadline is extended to February 15. The second deadline is for filing the form electronically with the IRS, which is March 31. If a deadline falls on a weekend or holiday, it moves to the next business day.
Step-by-Step Guide to Online Filing
The primary method for free electronic filing with the IRS is through its Information Returns Intake System (IRIS) portal. Businesses can also use third-party e-filing service providers, which often offer additional features for a fee.
To use the IRIS portal, you must first create an account and apply for a Transmitter Control Code (TCC). The TCC is a five-character code that identifies you as an authorized filer. The application can take up to 45 days to process, so you should complete this step well before the filing deadline.
Once your TCC is active, you can log in to the IRIS portal to prepare your forms. The platform allows you to enter information for each form individually or upload a .csv file containing data for multiple forms. You will enter the payer information, recipient details, and specific payment amounts.
After entering all data for each Form 1099-MISC, review the information for accuracy and submit the returns to the IRS. A benefit of e-filing is that Form 1096, Annual Summary and Transmittal of U.S. Information Returns, is not required.
Post-Filing Responsibilities
After submitting your forms to the IRS, you must provide a copy of Form 1099-MISC to each recipient. Many e-filing services offer to print and mail these copies on your behalf.
Some states also require a copy of the Form 1099-MISC. The IRS facilitates this through the Combined Federal/State Filing (CF/SF) Program. When you e-file through a participating system, the IRS automatically forwards your 1099 information to participating states, satisfying state filing requirements.
You should retain a copy of each filed Form 1099-MISC, the corresponding Form W-9, and documentation supporting the payment amounts. These records should be kept for a minimum of three years in case of future IRS inquiries.