What Form 1099-MISC (2019) Is For
IRS Form 1099-MISC (2019) is an information return used to report payments made during the 2019 calendar year to individuals, vendors, and other businesses for rents, prizes, awards, and other compensation. It applies when a payer provides at least $600 in compensation to a nonemployee, such as an independent contractor, or when royalty payments and gross royalties total $10 or more. The form ensures that all income paid is correctly reported to the IRS and the Social Security Administration for verification against the recipient’s tax return.
Employers and businesses must file Form 1099-MISC for any reportable payments made in the course of trade or business. Each payer is responsible for completing and submitting the appropriate form to both the IRS and recipients by the January filing deadlines. Filing accurately helps ensure compliance with federal income tax reporting requirements and reduces the risk of penalties during tax season.
When You’d Use Form 1099-MISC
Form 1099-MISC is used when a payer makes reportable payments for services or other forms of compensation that are not considered wages. Common examples include payments for rents, royalty payments, medical and legal fees, and awards made to independent contractors or other nonemployee individuals. These payments are considered reportable income and must be filed with the IRS using the correct form for the calendar year.
A business should file this form when it pays at least $600 in compensation for services or other work performed during the tax year. Royalty payments of $10 or more must also be reported. Beginning in 2020, compensation paid to nonemployees, such as contractors, was moved to Form 1099-NEC; however, Form 1099-MISC remains required for other types of income. Payers must obtain the correct taxpayer identification number, either an ITIN or Social Security number, using Form W-9 and ensure all forms are submitted and delivered by the January deadlines.
For complete details on reporting, withholdings, and tax filings, see our guide for Information Returns & Reporting Forms.
Key Rules or Details for 2019
For the 2019 calendar year, Form 1099-MISC was used to report payments made by a business for services, rent, prizes, and awards received in the course of trade or business. Payers were required to file the form if total compensation paid reached $600 or more to a nonemployee, such as an independent contractor, or $10 or more in royalty payments or gross royalties. The IRS used the information returns to match income reported with each taxpayer’s tax return, ensuring federal income tax compliance and accurate reporting.
Employers and businesses were required to collect a valid taxpayer identification number, either an ITIN or a Social Security number, from each recipient using Form W-9 before making payments. Each payment reported had to be accurate and filed using the appropriate form by the January deadline. Failing to report payments, using incorrect information, or not filing electronically when required could result in penalties under federal law.
Step-by-Step (High Level)
A payer should complete Form 1099-MISC using a transparent, organized process:
- Determine which payments are reportable by reviewing all 2019 business transactions to identify items subject to reporting rules.
- Gather recipient information by requesting a completed Form W-9 from each payee to obtain the legal name, address, and taxpayer identification number.
- Complete the form accurately by entering each payment in the corresponding box: Box 1 for rent, Box 2 for royalties, Box 3 for other income, and Box 7 for nonemployee compensation.
- Submit Copy A to the IRS with Form 1096 by the applicable deadline, mailing or e-filing as required.
- Deliver Copy B to each recipient by January 31 so the payee can file an accurate tax return.
- Retain Copy C and supporting documentation for at least three years in case of an IRS audit or discrepancy.
For more information about IRS assistance, including help with your tax questions and payment options, see this comprehensive guide.
Common Mistakes and How to Avoid Them
- Missing deadlines: Many filers overlook the January 31 deadline for nonemployee compensation. To avoid penalties, set reminders and file electronically before the due date.
- Reporting payments in the wrong box: For 2019, report nonemployee compensation in Box 7, not Box 3. Review form instructions carefully to ensure accurate placement.
- Incorrect taxpayer identification numbers: Always verify ITINs and SSNs using Form W-9 before submission. Incomplete or inaccurate numbers can trigger backup withholding or IRS notices.
- Failing to report required payments: Report all prizes, awards, and service payments that meet reporting thresholds—Cross-check payment records to ensure full compliance.
- Using the wrong form: For 2019, use Form 1099-MISC for nonemployee compensation. Starting in 2020, use Form 1099-NEC instead. Confirm the correct form for each tax year.
Careful review of deadlines, form versions, and taxpayer information ensures compliance and prevents costly filing delays or penalties.
What Happens After You File
After filing Form 1099-MISC, the IRS and the Social Security Administration match the payments reported with the amounts shown on recipients’ tax returns. Any difference between the two may trigger an IRS notice requesting clarification or assessment of additional taxes. Recipients must report all income listed on the form as taxable income on their own returns for the year it was paid.
If a payer discovers an error after submission, a corrected form should be filed immediately with both the IRS and the recipient. Employers and businesses should maintain accurate records and ensure all required forms are mailed, received, and stored correctly. Filing the appropriate form on time supports accurate reporting, helps avoid penalties, and promotes full compliance with federal income tax regulations.
FAQs
Who must file IRS Form 1099-MISC (2019)?
Any payer, business, or employer that made reportable payments of $600 or more during the 2019 calendar year must file Form 1099-MISC with the IRS. This includes compensation paid to independent contractors, rents, prizes, awards, and other services performed by nonemployees.
Are royalty payments reportable on Form 1099-MISC?
Yes, royalty payments and gross royalties totaling $10 or more must be reported on Form 1099-MISC. These payments are considered taxable income and must be included on the recipient’s tax return and verified by the Social Security Administration.
What is the difference between Form 1099-MISC and Form 1099-NEC?
For 2019, Form 1099-MISC was the appropriate form to report compensation paid to nonemployees such as independent contractors. Starting in 2020, the IRS introduced Form 1099-NEC to report nonemployee compensation separately from other types of income.
What information is required to complete Form 1099-MISC?
The payer must collect a valid taxpayer identification number (ITIN or SSN) using Form W-9 before making any payments. Each form must accurately display the total income paid, box details must be completed appropriately, and copies must be mailed to both the IRS and recipients by January.
What happens if the payments reported are incorrect?
If payments reported on Form 1099-MISC are inaccurate, the payer must file a corrected form with the IRS and send a corrected copy to the recipient. Filing the appropriate form promptly ensures accurate information returns and compliance with federal income tax law.
For more resources on filing or understanding prior-year IRS forms, visit our Form Summaries and Guides Library or see our IRS assistance guide.
