Form 1099 MISC- Line by Line Instructions

Updated on January 26, 2023 - 10:30 am by TaxBandits

The Internal Revenue Service (IRS) expects every business owner to file Form 1099-MISC to report miscellaneous payments made to the independent contractors for their work.

For the tax year 2020, payers have to report non employee compensations on a new separate form, the 1099-NEC. In past years, non-employee compensation has been reported on Form 1099-MISC Box 7. The Form 1099-NEC was reactivated to eliminate the ambiguity of two deadlines for the same form.

Although newly redesigned and rearranged, Form 1099-MISC is still used to report miscellaneous payments. Let's explore these changes and learn how to file your returns using line-by-line Instructions.

The following are the topics covered under this :

1. What’s New Changes in Form 1099-MISC 2022?

IRS Form 1099-MISC is used to report the miscellaneous payments made to an independent contractor or self-employed individuals for their work during the calendar year to the IRS.

For the 2022 tax year, the IRS has made some changes in Form 1099-MISC. The Form 1099-MISC box numbers rearranged from ( Box 13 to Box 18).

  • Box 13:

    FATCA Filing Requirement check box is now on Form 1099 MISC Box 13

  • Box 14:

    Excess golden parachute payments

  • Box 15:

    Nonqualified deferred compensation

  • Box 16 to 18:

    Report state or local income tax withheld from the payments

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2. What information should be filed on Form 1099-MISC?

Payers must furnish correct information on 1099-MISC. The following information must be provided:

1. Payer Details:

  • Payer's name
  • Street address, city or town, state or province, country, ZIP, or foreign postal code.
  • Contact number
  • Payer's TIN

2. Recipient Details:

  • Recipient's name
  • Recipient's TIN
  • Street address (including apt. no)
  • City or town, state or province, country, and ZIP or foreign postal code
  • Check box for FATCA filing requirement
  • Check box for 2nd Taxpayer Identification Number (TIN)

In Box 1 to Box 18, the payer reports various payments made and tax withheld from the contractor/recipient.

  • Box 1: Rents

    Report payment of $600 & above paid as rent.

  • Box 2: Royalties

    Report any payments over $10 made to an individual for royalties from oil, natural gas, mineral properties, or Intellectual properties (Copyrights and patents) during the tax year.

  • Box 3: Other income

    Report income paid as prizes, awards, or any payments made to a deceased employee's beneficiary.

  • Box 4: Federal income tax withheld

    Report backup withholding tax for payments to be made to a contractor. If a contractor furnishes an incorrect TIN, the payer is required to withhold a certain percentage of payment.

  • Box 5: Fishing boat proceeds

    Report payments made to fishing boat operators and crew members who are
    considered self-employed.

  • Box 6: Medical and health care payments

    Report payments made to physicians, medical and health insurance providers, and other healthcare service providers. This doesn't include payments made for prescription drugs.

  • Box 7: Payer made direct sales totaling $5,000 or more of consumer products to the recipient for resale

    Check this box if you sold a consumer product for a total value of $5000 or more for resale or buy-sell.

  • Box 8: Substitute payments in lieu of dividends or interest

    Report average substitute payments of $10 or more made in lieu of dividends or tax-exempt interest for a customer's securities loan. Substitute payments include interest accrued on securities.

  • Box 9: Crop insurance proceeds

    Report the crop proceeds of $600 or more paid to a farmer by an insurance company, unless the farmer informed the insurance companies that expenses have been capitalized under section 278, 263A or 447.

  • Box 10: Gross proceeds paid to an attorney

    Report the total amount of $600 or more paid to an attorney for legal services.

  • Box 11: Fish Purchased for Resale

    Report Payment for Fish Purchased for Resale in this box.

  • Box 12: Section 409A deferrals

    Report current year deferrals of a nonemployee under a nonqualified deferred compensation (NQDC) plan if it is subject to section 409A and any earnings on current and prior year deferrals.

  • Box 13: FATCA Filing Requirement

    Check the FATCA filing requirement on 1099-MISC, the payer is reporting on this Form 1099 to satisfy its chapter 4 account reporting requirement.

    Continue entering the payments that you made to the recipient and taxes withheld, if any, from the payments made to the recipient.

  • Box 14: Excess golden parachute payments

    Report excess golden parachute payments subject to a 20% excise tax.

  • Box 15: Nonqualified deferred compensation

    Report payments under an NQDC plan that do not meet the requirements of section 409A. Any payment reported in box 12 is currently taxable and is also included in this box.

  • Box 16 to Box 18

    Report state or local income tax withheld from the payments

Learn more about 1099-MISC State Filing Requirements.

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3. What is the deadline for reporting 1099 MISC?

The Form 1099-MISC reporting deadlines for the tax year 2022 are listed below.

Type of Filing Deadline
Sending recipients of 1099-MISC January 31, 2023

Get started with TaxBandits and your recipient copies will be delivered on time.

Paper filing 1099-MISC February 28, 2023

IRS suggests filers to file 1099 MISC electronically for quick processing and instant approval

E-filing 1099-MISC March 31, 2023

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Note: The deadline for sending COPY B to the recipient is February 15, 2023, if you report payments only in box 8 or 10.

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4. What are the different copies of Form-1099 MISC that need to be submitted?

Every business owner/payer can use the TaxBandits portal to prepare, download or email
and e-filing 1099-MISC tax returns to the IRS and state agency if required.

There are the five essential copies of the 1099-MISC and each has its own purpose:

  • Copy A: Transmit electronically to the IRS. Don't print this copy.
  • Copy B: Send to the vendor/recipient (Payer can send either send postal mail or email)
  • Copy C: Payer retainable copy.
  • Copy 1: For state filing when required. Not all states require you to file a state copy separately from Copy A.
  • Copy 2: When required, the recipient can file with the state income tax returns.

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5. How to file Form 1099-MISC Electronically?

File your Form 1099-MISC electronically with the IRS, and the required state using TaxBandits, an IRS authorized e-file provider supporting e-filing for all 1099, W2, 94x, and ACA Forms. Simply follow the steps mentioned below to file your Form 1099-MISC electronically with the IRS:

  • Step 1: Create a free TaxBandits account or Login If you have one already
  • Step 2: Enter Form 1099 MISC Information
  • Step 3: Review Form Information
  • Step 4: E-file it with the IRS and State

Filing your tax returns doesn’t have to be hard - TaxBandits can help you every step of your way! You can easily file returns, correct errors, manage,and mail copies to your recipients. For the year 2022, TaxBandits has enabled a new scheduling feature that allows users to transmit completed forms on a future date of their choice. This gives you additional time to revise the tax forms freely without penalty. Why wait? Get started with TaxBandits today and stay compliant with the IRS!

Get started with TaxBandits today and stay compliant with the IRS!

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