One notable use of Form 1099-MISC was to report amounts paid by a business (including nonprofits[1]: 1 ) to a non-corporate US resident independent contractor for services (in IRS terminology, such payments are nonemployee compensation), but starting tax year 2020, this use was moved to the separate Form 1099-NEC.
The ubiquity of the form has also led to use of the phrase "1099 workers" or "the 1099 economy" to refer to the independent contractors themselves.
[2] Other uses of Form 1099-MISC include rental income, royalties, and Native American gaming profits.
[6] In accordance with the recently passed PATH Act, these deadlines will be changing so the mailing and transmittal are both January 31 moving forward starting with Tax Year 2016.
[8][9] Other uses of Form 1099-MISC include rental income, royalties, and Native American gaming profits.
[3] When payments are made through third-party networks, filing Form 1099-MISC is not required.
A major difference exists for personal payments when the payee is a nonresident for tax purposes (including undocumented alien).
[1]: 4 Withholding requirements are different for nonresident payees, in which case Form 1042-S is used instead.
Individuals whose income is primarily from Form 1099-MISC therefore need to send estimated tax payments through the Electronic Federal Tax Payment System (EFTPS) or by paper-filing Form 1040-ES with a check.
[16] At the time, employers were required to use the form to report salaries paid in excess of $800.
However, with this provision, a party getting paid through payment card or third-party payment network transactions, seeking to avoid paying taxes, can simply opt to avoid meeting either or both the 200 transaction and $20,000 minimum threshold needed to file Form 1099-K.[18] Even if a party doesn't seek to avoid paying taxes, if they fail to meet either threshold criteria for filing Form 1099-K, they simply may receive neither a Form 1099-K from the payment settlement entity nor a Form 1099-MISC from the payer.