Whether you're a freelancer, contractor, landlord, or business owner, understanding Form 1099-MISC is essential for tax compliance. This guide breaks down everything you need to know about the 2019 version of this important tax form in plain English.

What the Form Is For

Form 1099-MISC is the IRS's way of tracking various types of income that aren't regular wages from an employer. Think of it as a reporting card that businesses send to both you and the IRS whenever they pay you $600 or more during the year for certain services or payments. IRS.gov

Who needs to file it? Businesses, landlords, nonprofit organizations, and anyone operating a trade or business must file Form 1099-MISC when they pay:

• At least $600 for rents, services performed by non-employees (freelancers, independent contractors), prizes and awards, medical and health care payments, or payments to attorneys
• At least $10 for royalties or broker payments in lieu of dividends
• Any amount if federal income tax was withheld under backup withholding rules

Who receives it? You'll get a 1099-MISC if someone paid you for services and you weren't their employee (meaning no W-2 form). Common recipients include freelance writers, graphic designers, consultants, independent contractors, landlords receiving rent, and attorneys.

Important note: In 2019, nonemployee compensation (what most freelancers and contractors receive) was still reported in Box 7 of Form 1099-MISC. Starting in 2020, this moved to a new form called 1099-NEC, but for tax year 2019, Box 7 is where this information appears. IRS.gov

When You'd Use It (Late/Amended Filings)

Regular Deadlines for 2019

Understanding the filing deadlines is crucial because late filing can trigger penalties:

• January 31, 2020 – If reporting nonemployee compensation in Box 7 (the most common situation for contractors and freelancers), forms must be filed with the IRS and furnished to recipients by this date
• February 28, 2020 – Paper filing deadline for all other payment types (not Box 7)
• March 31, 2020 – Electronic filing deadline for all other payment types (not Box 7)

Recipients must receive their copies by January 31, 2020 (or February 18, 2020, if you're reporting payments in boxes 8 or 14). IRS.gov

When You Need to File Corrected Forms

Life happens, and mistakes occur. You'll need to file an amended 1099-MISC if you discover errors after filing, such as:

• Wrong payment amounts
• Incorrect taxpayer identification numbers (TINs)
• Wrong recipient name
• Reported payment in the wrong box
• Used the wrong form type entirely

Correction procedures depend on the error type:

• Money amount or checkbox errors: Prepare a new form with ""CORRECTED"" marked at the top, enter the correct information, and file it with a new Form 1096
• TIN or name errors: This requires a two-step process—first file a ""corrected"" form with zero amounts to cancel the original, then file a brand-new form (not marked corrected) with the correct information

File corrections as soon as you discover the error. There's no specific deadline, but prompt action helps you avoid penalties and keeps recipients from filing incorrect tax returns. IRS.gov

Key Rules for 2019

Several important rules governed Form 1099-MISC in 2019:

The $600 Threshold Rule: You must file for most payments totaling $600 or more to any individual or unincorporated business during the year. This applies to rents, services, attorney fees, and most other payment types. Royalties have a lower $10 threshold.

Corporation Exception: Generally, you don't need to file 1099-MISC for payments to corporations. However, critical exceptions exist for:

• Medical and health care payments (Box 6)
• Attorney fees and gross proceeds to attorneys (Boxes 7 and 14)
• Fish purchases for cash (Box 7)
• Federal executive agency payments for services (Box 7)

Trade or Business Requirement: You only file Form 1099-MISC for payments made in the course of your trade or business. Personal payments—like paying your neighbor to mow your home lawn—aren't reportable. However, nonprofit organizations and government agencies must file too. IRS.gov

Backup Withholding: If a contractor or service provider refuses to provide their taxpayer identification number (TIN) or the IRS notifies you that the TIN is incorrect, you must withhold 24% of payments and report this in Box 4. You must file Form 1099-MISC regardless of the payment amount when backup withholding applies.

What's NOT Reported: Don't use Form 1099-MISC for:

• Employee wages (use Form W-2)
• Payments to corporations (with exceptions noted above)
• Payments for merchandise, freight, or storage
• Credit card payments (reported on Form 1099-K instead)
• Payments to tax-exempt organizations

The Box 7 January 31 Rule: This is the most important deadline rule for 2019. When reporting nonemployee compensation in Box 7, both the IRS filing AND recipient copy must be provided by January 31, 2020—no exceptions for electronic filing. All other payment types have later deadlines. IRS.gov

Step-by-Step Filing (High-Level)

Step 1: Collect Information Throughout the Year

Before you pay anyone for services, have them complete Form W-9 (Request for Taxpayer Identification Number and Certification). This form provides their legal name, business name (if applicable), address, and TIN (Social Security Number or Employer Identification Number). Keep these on file—you'll need them at year-end.

Step 2: Track Your Payments

Maintain accurate records of all payments made to non-employees and other reportable recipients. Most accounting software can track this automatically, but a simple spreadsheet works too. Note the recipient name, TIN, and total payments for the year.

Step 3: Determine Who Gets a Form

At year-end, identify everyone you paid $600 or more (or $10+ for royalties) during 2019 for reportable payments. Remember the corporation exceptions.

Step 4: Complete the Forms

You'll need multiple copies of each form:

• Copy A – File with the IRS
• Copy 1 – File with state tax department (if required)
• Copy B – Give to recipient for tax filing
• Copy 2 – Give to recipient for state tax filing
• Copy C – Keep for your records

Fill out each copy with:

• Your business name, address, and TIN (payer information)
• Recipient's name, address, and TIN
• Payment amount in the appropriate box (Box 7 for nonemployee compensation, Box 1 for rent, etc.)
• Any backup withholding in Box 4

Step 5: File with the IRS

Submit Copy A to the IRS along with Form 1096 (Annual Summary and Transmittal of U.S. Information Returns). You can file on paper or electronically. Electronic filing is mandatory if you're filing 250 or more forms. Mail paper forms to the address specified in the instructions (varies by location).

Step 6: Distribute Copies to Recipients

Send Copy B (and Copy 2 if applicable) to each recipient by January 31, 2020. You can mail them or provide them electronically if the recipient consents.

Step 7: Keep Records

Retain Copy C and your supporting documentation for at least three years in case of IRS questions or audits. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Missing the January 31 Deadline for Box 7

Many filers assume all 1099 forms are due February 28 or March 31, but nonemployee compensation (Box 7) must be filed by January 31. Missing this deadline triggers immediate penalties. Set calendar reminders and don't wait until the last minute. IRS.gov

Mistake #2: Incorrect or Missing TINs

Filing with wrong Social Security Numbers or Employer Identification Numbers is extremely common. Always collect Form W-9 before making the first payment. Verify the TIN format is correct (XXX-XX-XXXX for SSNs, XX-XXXXXXX for EINs). The IRS offers a TIN Matching Program to verify TINs before filing.

Mistake #3: Reporting in the Wrong Box

Payment type determines which box to use. Rent goes in Box 1, nonemployee compensation in Box 7, attorney fees in Box 7, but gross proceeds paid to attorneys go in Box 14. Read the instructions carefully—the IRS uses box placement to verify that recipients report income correctly. IRS.gov

Mistake #4: Forgetting the Decimal Point

Always show dollars and cents with two decimal places. Write 1230.00, not 1230. This seems minor but causes processing delays.

Mistake #5: Duplicate Filing

Don't submit the same information twice. If you already filed and need to correct something, follow the correction procedures—don't just resend the original. IRS.gov

Mistake #6: Mismatched Information on Forms 1096 and 1099-MISC

Your name, address, and TIN must be identical on Form 1096 and all attached Forms 1099-MISC. Mismatches cause processing problems.

Mistake #7: Mixing Form Types with One Form 1096

If you're filing multiple types of information returns (1099-MISC and 1099-INT, for example), you need a separate Form 1096 for each type. Don't bundle different form types together.

Mistake #8: Not Checking the Corporation Exception

Many filers skip corporations entirely, but remember—attorneys, medical providers, and certain other corporate payments must be reported. IRS.gov

Mistake #9: Reporting Personal Payments

Only report payments made in your trade or business. If you personally hire someone to paint your house, that's not reportable (unless you're in the real estate rental business).

What Happens After You File

For Payers (Businesses Filing the Form)

Once you file, the IRS processes your forms and matches them against recipient tax returns. If everything matches, you'll hear nothing—silence is good news. The IRS may contact you if:

• There are discrepancies between what you reported and what the recipient reported
• TINs don't match IRS records
• You failed to file required forms (the IRS identifies missing forms through audits or recipient complaints)
• Penalties are assessed for late or incorrect filing

Penalties for payers vary based on how late you file:

• 1-30 days late: $50 per form (maximum $556,500 per year)
• 31 days to August 1: $110 per form (maximum $1,669,500 per year)
• After August 1 or not filed: $270 per form (maximum $3,339,000 per year)
• Intentional disregard: $550 per form with no maximum

Smaller businesses (gross receipts of $5 million or less) face lower maximum penalties. File on time to avoid these costly mistakes. IRS.gov

For Recipients (People Receiving the Form)

If you receive a 1099-MISC, you must report the income on your tax return. The IRS already knows you received this income because they got a copy of your form.

• Box 7 nonemployee compensation: Report on Schedule C if you're self-employed; you'll likely owe self-employment tax
• Box 1 rents: Report on Schedule E (unless you provided significant services, then Schedule C)
• Box 3 other income: Usually goes on Schedule 1, ""Other income"" line
• Box 6 medical payments: Report on Schedule C if you're a healthcare provider

If the form has errors, contact the payer immediately to request a corrected form. If they refuse or you can't reach them, attach an explanation to your tax return and report the income correctly. Don't ignore an incorrect 1099-MISC—the IRS will notice if your return doesn't match their records.

FAQs

Q1: I'm a freelancer who received a 1099-MISC. Do I have to pay taxes on this income even though no taxes were withheld?

Yes, absolutely. Unlike employee wages where taxes are withheld automatically, 1099-MISC income is reported but not taxed at the source. You're responsible for paying income tax and self-employment tax (Social Security and Medicare) on this income. Consider making quarterly estimated tax payments using Form 1040-ES to avoid penalties and a large tax bill at year-end. The self-employment tax rate is 15.3% (12.4% for Social Security and 2.9% for Medicare), plus your regular income tax rate. IRS.gov

Q2: I paid a contractor $500 in 2019. Do I need to file a 1099-MISC?

No. The reporting threshold is $600 or more for most payment types (except royalties at $10+). If you paid less than $600, no form is required—but you should still keep records of the payment for your business deductions.

Q3: I hired an LLC to do work for me. Do they get a 1099-MISC?

It depends on how the LLC is taxed. If the LLC is taxed as a sole proprietorship or partnership, yes, you should file. If the LLC is taxed as a corporation (C-corp or S-corp), generally no—unless you're paying for legal services, medical services, or certain other exceptions. The best approach is to have the LLC complete Form W-9, which indicates their tax classification. IRS.gov

Q4: What's the difference between an employee and an independent contractor for 1099 purposes?

Employees receive Form W-2 and have taxes withheld from their paychecks. Independent contractors receive Form 1099-MISC (or 1099-NEC for later years) and handle their own taxes. The distinction depends on the degree of control—if you control when, where, and how work is performed, the person is likely an employee. If they control their own methods and work for multiple clients, they're likely an independent contractor. Misclassifying workers can lead to penalties, so consult IRS Publication 15-A if you're uncertain.

Q5: I received a 1099-MISC but the amount is wrong. What should I do?

Contact the payer immediately and request a corrected form. Explain the discrepancy clearly and provide any supporting documentation (invoices, receipts, cancelled checks). The payer should file a corrected 1099-MISC and send you the corrected copy. If they refuse or you can't reach them, file your tax return with the correct income amount and attach a statement explaining the discrepancy. Keep thorough records in case the IRS asks questions. IRS.gov

Q6: Can I file my 1099-MISC forms online?

Yes. The IRS offers the Information Returns Intake System (IRIS) for filing smaller volumes of forms. For larger volumes (250+ forms), you must file electronically using software that meets IRS specifications (Publication 1220 has the technical requirements). Many tax software programs and payroll services offer 1099 e-filing. Electronic filing extends your deadline and reduces errors.

Q7: I'm a recipient and didn't receive a 1099-MISC, but I know I should have. Do I still need to report the income?

Yes. You must report all income on your tax return, whether or not you received a 1099-MISC. The form is simply an information document—it doesn't determine whether income is taxable. If you didn't receive an expected form by mid-February, contact the payer. If they won't provide one, estimate your income based on your own records (invoices, bank deposits, etc.) and report it. The IRS may catch up with the payer later, but you're protected because you reported the income correctly. IRS.gov

For More Information

• 2019 Instructions for Form 1099-MISC
• 2019 Form 1099-MISC
• 2019 General Instructions for Certain Information Returns
• IRS Information Reporting Customer Service: 866-455-7438

This guide is based on official IRS publications and is intended for informational purposes. For specific tax advice, consult a qualified tax professional.