IRS Form 1099 should be issued to which type of worker?

IRS Form 1099 should be issued to which type of worker?

• A. An employee who earned wages
• B. A corporation
• C. A nonemployee who was paid at least $600 for services during the year
• D. A sole proprietor with no employees

Answer: (C)

Form 1099 is used to report payments for services to people who are not your employees. The key point is that you issue a 1099-NEC to a nonemployee when you’ve paid them $600 or more for services during the year. Employees receive a W-2, not a 1099, and corporations are generally exempt from 1099 reporting for services (with some exceptions, such as payments to attorneys). So in a landscaping context, you’d issue a 1099 to an independent contractor who performed services for you and was paid at least $600 in the year. If the worker is a sole proprietor acting as an independent contractor and meets the threshold, a 1099 would apply.

Form 1099 is used to report payments for services to people who are not your employees. The key point is that you issue a 1099-NEC to a nonemployee when you’ve paid them $600 or more for services during the year. Employees receive a W-2, not a 1099, and corporations are generally exempt from 1099 reporting for services (with some exceptions, such as payments to attorneys). So in a landscaping context, you’d issue a 1099 to an independent contractor who performed services for you and was paid at least $600 in the year. If the worker is a sole proprietor acting as an independent contractor and meets the threshold, a 1099 would apply.