Form 1099-MISC Filing Checklist for Tax Year 2017
Purpose
Form 1099-MISC reports miscellaneous income to recipients and the IRS, including nonemployee compensation, rents, royalties, and other specified payments. For 2017, critical filing deadlines depend on which boxes contain reportable amounts. Copy B must reach recipients by January 31, 2018, with a February 15, 2018 extension if reporting box 8 or box 14 payments. Copy A files with the IRS by January 31, 2018, for box 7 filers (both paper and electronic), otherwise February 28, 2018, for paper or April 2, 2018, for electronic filing.
Preparation Steps
Step 1: Verify Recipient Identification
Ensure you have the recipient’s complete SSN, ITIN, ATIN, or EIN in your records. While the form may display only the last four digits on copies sent to recipients for privacy protection, your records must contain the full taxpayer identification number. Use Form W-9 to obtain TINs when necessary, especially for attorney payments where TIN collection is mandatory regardless of entity type.
Step 2: Classify Income by Box Type and Understand Filing Deadlines
Determine which boxes apply to each payment. Box 7, nonemployee compensation, triggers the January 31, 2018 IRS filing deadline for both paper and electronic submissions. Box 8 substitute payments or box 14 attorney proceeds extend the recipient copy due date to February 15, 2018. All other boxes follow standard deadlines: February 28, 2018, for paper filing or April 2, 2018, for electronic filing with the IRS.
Step 3: Report Box 1 Rents Correctly
Enter amounts of $600 or more for real estate rentals, machine rentals, or pasture rentals. If you provided significant services alongside the rental, sold real estate as a business, or rented personal property as a business, the recipient may need to report on Schedule C rather than Schedule E. Public housing agencies must report rental assistance payments in this box.
Step 4: Report Box 2 Royalties by Asset Type
Report gross royalty payments of $10 or more before reduction for taxes or fees. Recipients report oil, gas, mineral, copyright, and patent royalties on Schedule E. Provide guidance per Publication 544 for timber, coal, and iron ore royalties. Literary agents receiving royalties must report gross amounts paid to authors regardless of whether the publisher reported payments to the agent.
Step 5: Handle Box 5 Fishing Boat Proceeds
As the payer (typically the boat operator), report each crew member’s individual share of proceeds from the catch or fair market value of distributions in kind for boats with normally fewer than 10 crew members. Include a cash payment of up to $100 per trip that is contingent on a minimum catch and paid for additional duties, such as mate, engineer, or cook. Recipients should report this income on Schedule C and complete Schedule SE if net self-employment earnings reach $400 or more.
Step 6: Report Box 6 Medical and Health Care Payments
Enter payments of $600 or more made to physicians or other medical and health care service providers. Include payments by insurers under health, accident, and sickness insurance programs. The exemption for corporate payments does not apply to medical providers, including professional corporations. Recipients report this on Schedule C if they are individuals; corporate, fiduciary, or partnership recipients follow different rules.
Step 7: Monitor Box 7 Nonemployee Compensation Requirements
Report payments of $600 or more for services performed by nonemployees, including fees, commissions, prizes, awards, and fish purchases for cash. Box 7 triggers the January 31, 2018 IRS filing deadline. Amounts in box 7 are generally subject to self-employment tax. If you did not withhold income, Social Security, or Medicare tax and the recipient believes they were misclassified as an independent contractor, direct them to Form 8919 to calculate their share of uncollected Social Security and Medicare taxes.
Step 8: Report Section 409A Boxes 15a and 15b Separately
Box 15a shows deferrals under compliant nonqualified deferred compensation plans. Box 15b shows income from noncompliant plans that must also be included in box 7. Recipients of box 15b income face a 20 percent additional tax under IRC Section 409A(a)(1)(B) plus a premium interest tax calculated at the IRS underpayment rate plus one percentage point. These penalties apply in addition to ordinary income tax and are reported on Form 1040 or Form 1040NR.
Step 9: Report Box 13 Excess Golden Parachute Payments
Enter excess golden parachute payments, which are parachute payments exceeding the recipient’s base amount (average annual compensation over the prior five tax years). Recipients pay a 20 percent excise tax under IRC Section 4999 on these excess amounts in addition to direct income tax. Direct recipients to Form 1040 or Form 1040NR instructions for proper reporting.
Step 10: Report Box 14 Attorney Gross Proceeds
Include gross proceeds of $600 or more paid to attorneys in connection with legal services, regardless of whether services were provided to you or whether the attorney is the exclusive payee. Report the full amount paid; you are not required to separately report the claimant’s attorney fees subsequently paid from these funds. Recipients report only the taxable portion as income after deducting business expenses.
Step 11: Check FATCA Filing Requirement Box When Applicable
Check this box if you are a U.S. payer reporting on Form 1099-MISC to satisfy chapter 4 account reporting requirements, or if you are a foreign financial institution reporting a U.S. account pursuant to applicable elections under Regulations section 1.1471-4(d)(5)(i)(A). Recipients may have additional Form 8938 filing obligations when this box is checked.
Step 12: Complete Form 1096 and Submit
Prepare Form 1096 as a transmittal summary for all paper Forms 1099-MISC filed with the IRS. Ensure Form 1096 totals match the sum of all individual Forms 1099-MISC in your submission. Attach all paper Copy A forms to Form 1096 according to the 2017 General Instructions for Certain Information Returns. Electronic filers do not submit Form 1096.
Year-Specific Updates for 2017
Box 7 nonemployee compensation filers face an accelerated deadline: file Copy A with the IRS by January 31, 2018, using either paper or electronic filing procedures. This unified deadline eliminates the traditional electronic filing extension. All other filers use the standard February 28, 2018, paper deadline or the alternative April 2, 2018, electronic deadline.
Copy B recipient furnishment follows a two-tier structure: January 31, 2018 for most boxes, but February 15, 2018 if box 8 substitute payments or box 14 attorney gross proceeds are reported. This administrative accommodation applies only to the 2017 filing season.
Section 409A box 15b income triggers dual reporting: the amount appears in both box 15b and box 7. Recipients face a 20 percent additional tax under IRC Section 409A(a)(1)(B)(i)(II) plus premium interest tax equal to the IRS underpayment rate plus one percentage point. These penalties compound on top of ordinary income tax rates and require careful calculation on Form 1040 or Form 1040NR using amounts from both boxes.
The FATCA filing requirement checkbox serves as formal notification under chapter 4 account reporting requirements. When checked, it alerts recipients to potential Form 8938 reporting obligations, expanding due diligence responsibilities beyond prior tax years for accounts held at foreign financial institutions or with certain U.S. payers that report under Chapter 4 elections.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
