Deal Pack Blog
Form 1099, Is Your DMS Equipped?
It’s that time of year again, time to get everything in line for the tax man and don’t forget to file and send out your 1099s either! If you are currently operating a business – it is a federal requirement to file a 1099-Misc (Misc. Income) for every person you have paid $600 or more in the current tax year. To qualify as part of the $600 total, payments must have been made in the course of your trade or business. This means that personal payments need not be reported. The Form 1099-Misc is most commonly used to report non-employee compensation (Box 7) but there are various other reasons to file Form 1099’s such as rent payments, and attorney fees. See irs.gov for more details.
For the purpose of Form 1099-Misc, non-employee compensation is only considered if these 4 conditions are met: the person is not your employee, the payment(s) were for services done in the course of your trade or business, the payment(s) were made to an individual, partnership, or an estate & the total of all payments amount to $600 or more. Keeping track of such payments can be a daunting task unless you’ve got a software solution on your side. Be sure when searching for a DMS that you consider their ability to track such payments, it will make tax season that much easier!