Instructions for Form 1099-MISC Checklist—2015 Tax
Year
Overview of Form 1099-MISC for the 2015 Tax Year
Form 1099-MISC reports certain types of miscellaneous income paid during the calendar year
to individuals and entities that are not treated as employees. Common reportable payments include rents, royalties, fishing boat proceeds, prizes, awards, legal fees, and other forms of nonemployee compensation as defined under the 2015 instructions. Accurate completion supports proper income matching and reduces the risk of penalties.
This reference guide consolidates verified 2015 reporting rules into a single, corrected framework. Each section addresses a specific requirement or clarification relevant to preparing, filing, and furnishing Form 1099-MISC for the 2015 tax year. The structure follows the logical order used when reviewing payment records, completing the form, and meeting distribution deadlines.
Filing Requirements and Box Designations
Step 1: Verify Box 1 (Rents) Reporting Threshold
Box 1 reports rental income paid for real property, equipment, or similar arrangements during the calendar year. For 2015, report rents totaling $600 or more paid to a single recipient, regardless of whether payment was made by check, cash, or electronic transfer. Review all rent-related disbursements to confirm that cumulative payments meet the reporting threshold.
Confirm that amounts reported in Box 1 reflect gross rental payments before deductions or offsets. Include all reportable rent paid during the year, even when payments occurred intermittently or through multiple transactions. Consistent aggregation across the calendar year ensures accurate reporting and alignment with recipient income records.
Step 2: Determine Whether Section 409A Deferred Compensation Applies
For the 2015 tax year, Section 409A, deferred compensation, appears in Box 15a for deferrals and Box 15b for income. These boxes apply only when payments fall under nonqualified deferred compensation arrangements subject to Section 409A rules. Review agreements and payment terms to determine whether any amounts require reporting in these boxes.
Leave Boxes 15a and 15b blank when no Section 409A deferrals or income apply. Incorrect reporting in these boxes can create mismatches and compliance issues. Accurate identification of deferred compensation depends on the substance of the arrangement rather than the payment label used internally.
Step 3: Confirm Health Insurance Gross-Up Payments Are Not Misreported
Do not report health insurance gross-up payments in Box 12 on the 2015 Form 1099-MISC. For that year, Box 12 is designated for Section 409A deferrals and does not apply to health insurance reimbursements or gross-up arrangements. Review any fringe benefit payments to ensure they do not appear in incorrect boxes.
Misclassification of payments can lead to incorrect income characterization for the recipient.
Confirm the nature of each payment before assigning a box number. Proper box usage supports accurate tax treatment and avoids unnecessary corrections after filing.
- Rents are reported in Box 1 when total payments exceed $600.
- Royalties are reported in Box 2 when total payments exceed $10.
- Other reportable payments are subject to the six-hundred-dollar threshold when
Step 4: Identify Transactions That Meet Reporting Thresholds
Different payment types have different reporting thresholds for the 2015 tax year. Apply the correct threshold based on the box used for reporting the payment. Common thresholds include: applicable.
Track payments by recipient throughout the year to determine whether thresholds are met.
Aggregation across all payments of the same type is required to make this determination.
Step 5: Apply the Corporate Payee Exception Correctly
Payments made to corporations are generally exempt from Form 1099-MISC reporting for 2015.
This general exemption does not apply to payments for legal services. Attorneys’ fees must be reported even when paid to a corporation, partnership, or other entity type.
Verify the payee’s legal classification using Form W-9 or equivalent documentation. Confirm whether the payment falls within an exception to the corporate exemption before deciding not to report. Proper classification reduces the risk of underreporting required payments.
Step 6: Report Fishing Boat Proceeds When Required
Box 5 reports fishing boat proceeds paid to crew members. Report amounts paid to crew members based on a share of the catch or a share of gross proceeds from the sale of the catch
during 2015. These amounts are reportable even when the crew member receives no cash payment.
Review fishing-related payment arrangements carefully to determine whether Box 5 applies.
Accurate reporting of fishing boat proceeds ensures proper income recognition for recipients who operate under industry-specific compensation structures.
Step 7: Complete the Recipient Information Accurately
Each Form 1099-MISC requires the recipient’s correct legal name, address, and taxpayer identification number. Ensure the name entered matches IRS records and corresponds to the provided identification number. Use the legal name rather than a trade name whenever possible.
Incorrect or missing identification information can delay processing and trigger notices. When a recipient uses a trade name or DBA, include it only if space permits and after listing the legal name. Careful review of recipient details supports successful matching with tax returns.
Step 8: Verify the Account Number Field When Applicable
The account number field identifies specific accounts associated with a recipient. This field is required when filing more than one Form 1099-MISC for the same recipient due to multiple accounts. The field is also needed when the FATCA filing requirement box is checked.
Ensure that any account number entered matches internal records and remains consistent across filings. Accurate account identification helps the IRS distinguish between multiple forms issued to the same recipient.
Step 9: File Copy A With the IRS by the Applicable Deadline
Copy A of Form 1099-MISC must be filed with the IRS by February 29, 2016, when filing on paper. When filing electronically, the deadline extends to March 31, 2016. Confirm the filing method early to ensure compliance with the correct deadline.
Late filing may result in penalties unless reasonable cause applies. Retain proof of filing and confirmation records to support compliance in the event of an inquiry.
Step 10: Furnish Copy B to Recipients on Time
Provide Copy B of Form 1099-MISC to each recipient by January 31, 2016. A single payee statement may report all Form 1099-MISC payment types issued to the same recipient. When multiple forms apply, include all copies together.
Timely delivery allows recipients to prepare accurate tax returns. Confirm delivery addresses and methods to reduce the risk of undelivered statements.
Step 11: Record Backup Withholding When Required
Box 4 reports federal income tax withheld under backup withholding rules. For 2015, the backup withholding rate is twenty-eight percent. Apply backup withholding when a recipient fails to provide a valid taxpayer identification number or when the IRS notifies you of a mismatch.
Do not assume backup withholding never applies to corporate recipients. Certain payments, including attorneys’ fees and gross proceeds paid to attorneys, remain subject to backup withholding rules. Record the withheld amounts accurately to support reconciliation.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 12: Attach Form 1096 for Paper Filings
Form 1096 serves as the annual summary and transmittal for paper Forms 1099-MISC. This form is required only when filing on paper and is not used for electronic submissions. Complete one Form 1096 for each type of information return filed.
Include totals for the number of forms and reported amounts. Attach Form 1096 to the front of the paper Copy A form before mailing. Proper assembly supports efficient processing.
Key 2015 Instruction Changes and Clarifications
Several clarifications apply specifically to the 2015 tax year and affect how Form 1099-MISC is completed. Section 409A: deferred compensation reporting uses Box 15a for deferrals and Box
15b for income. Earlier box designations do not apply for this year.
Reporting thresholds vary by payment type and must be applied separately. Royalties trigger reporting at $10, while rents generally trigger reporting at $600. Apply the correct threshold based on the nature of the payment rather than a single universal rule.
Payments to corporations remain generally exempt from reporting, with a clear exception for legal services. Attorneys’ fees must be reported regardless of the entity type receiving payment.
Verify payee classification and service type before applying an exemption.
The standard six-hundred-dollar reporting threshold does not automatically apply to payments made to nonresident aliens. International reporting rules may require a different information return. Determine the recipient’s tax status before issuing Form 1099-MISC in cross-border situations.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
