Federal Form 1099-MISC is used to report payments of $600 or more to persons not treated as employees for services performed for the business. Which of the following is the correct threshold?

Federal Form 1099-MISC is used to report payments of $600 or more to persons not treated as employees for services performed for the business. Which of the following is the correct threshold?

• A. $400
• B. $500
• C. $1,000
• D. $600

Answer: (D)

The key idea is the reporting threshold for payments to people who aren’t employees. When you pay someone for services and they’re not on your payroll, you must report that amount to the IRS on Form 1099-MISC if it reaches a certain total in a calendar year. That threshold is $600, so payments of $600 or more must be reported. Payments under $600 generally don’t require 1099 reporting. There are a few exceptions (like payments to corporations or for specific types of services), but for typical independent contractor work, the cutoff to file a 1099-MISC is $600.

The key idea is the reporting threshold for payments to people who aren’t employees. When you pay someone for services and they’re not on your payroll, you must report that amount to the IRS on Form 1099-MISC if it reaches a certain total in a calendar year. That threshold is $600, so payments of $600 or more must be reported. Payments under $600 generally don’t require 1099 reporting. There are a few exceptions (like payments to corporations or for specific types of services), but for typical independent contractor work, the cutoff to file a 1099-MISC is $600.