What 1099 Form Do Attorneys Get for Legal Services?

1099 forms are information returns the Internal Revenue Service (IRS) uses to track income paid to independent contractors and other non-employees. Attorneys, as independent professionals, frequently receive various 1099 forms documenting payments for their services. Understanding these forms is important for both the payer, who must issue them, and the attorney, who must accurately report their income for tax purposes and compliance.

Key 1099 Forms Attorneys Receive

Attorneys primarily receive two types of 1099 forms: Form 1099-NEC, for nonemployee compensation, and Form 1099-MISC, for miscellaneous income. Form 1099-NEC is the main document for reporting legal fees paid for services rendered. Nonemployee compensation includes payments made to individuals or entities for services performed in the course of a trade or business when the recipient is not an employee. For payments made in 2025, this form is required when the total compensation to an attorney reaches $600 or more in a calendar year.

Form 1099-MISC is relevant for other specific types of payments an attorney might receive. Box 10 of Form 1099-MISC reports “Gross proceeds paid to an attorney.” This applies to the total amount of a settlement or judgment paid to an attorney in connection with legal services, regardless of whether the attorney ultimately retains the entire amount or disburses a portion to the client. This reporting is mandatory for payments of $600 or more made in 2025. Other scenarios for receiving a 1099-MISC might include rental income if an attorney leases out property, or certain referral fees that do not qualify as nonemployee compensation.

Payer Obligations for Issuing 1099s

Any individual or entity operating a trade or business must issue a Form 1099 to an attorney if payments for services or gross proceeds related to legal matters meet certain thresholds. This includes businesses, other law firms, or individuals engaging an attorney for business-related services.

Payments to attorneys for legal services are reportable on Form 1099-NEC even if the attorney or law firm is organized as a corporation. This is an exception to the general rule that payments to corporations are often exempt from 1099-NEC reporting. Gross proceeds paid to an attorney in connection with legal services, reported on Form 1099-MISC Box 10, must also be reported regardless of the attorney’s business structure.

Payers must furnish a copy of Form 1099-NEC to the attorney by January 31 of the year following the payment. The same January 31 deadline applies for filing Form 1099-NEC with the IRS. For Form 1099-MISC, the recipient copy is also due by January 31. The deadline for filing Form 1099-MISC with the IRS is typically February 28 for paper filing or March 31 for electronic filing.

Attorney’s Income Reporting and Tax Implications

Upon receiving a 1099-NEC, an attorney must report the income as self-employment income on their tax return. This income is typically reported on Schedule C (Form 1040), Profit or Loss from Business. The net earnings from self-employment are subject to self-employment tax, which covers Social Security and Medicare contributions for independent contractors. For 2025, the self-employment tax rate is 15.3%, consisting of 12.4% for Social Security (up to an income limit of $176,100) and 2.9% for Medicare.

Since income reported on 1099 forms does not have taxes withheld by the payer, attorneys are required to pay estimated taxes throughout the year to avoid underpayment penalties. Estimated tax payments, covering both income tax and self-employment tax, are typically made in quarterly installments using Form 1040-ES if the attorney expects to owe at least $1,000 in taxes.

Amounts reported in Box 10 of Form 1099-MISC represent gross proceeds paid to the attorney, which often includes funds belonging to the client. An attorney should report the gross amount on Schedule C as business income and then deduct the portion paid to the client as an expense. This ensures only the attorney’s actual fee and expenses retained are counted as taxable income.

Specific Scenarios and Reporting Nuances

If a business pays a law firm, even one structured as a corporation, $600 or more for legal services in 2025, a Form 1099-NEC must be issued. This ensures comprehensive reporting of legal fees regardless of the recipient entity’s corporate status.

Attorneys may also encounter Form 1099-K, which reports transactions processed through third-party payment networks, such as credit card processors. For 2025, the reporting threshold for Form 1099-K is $20,000 in aggregate payments and more than 200 transactions. While some legal fees might be paid via these networks, Form 1099-NEC remains the primary reporting method for direct nonemployee compensation for legal services.

Reimbursements for expenses are not reported on 1099 forms if they are part of an “accountable plan.” An accountable plan requires the attorney to substantiate expenses with receipts, have a business connection for the expense, and return any excess reimbursements in a timely manner. If these conditions are met, the reimbursements are not considered taxable income to the attorney.