Tick tock, just a friendly reminder that brokerages need to issue 1099’s by February 15, 2023. Brokers/brokerages must issue and file a 1099 MISC for each person paid at least $600 during the previous year. Remember you pay the broker of record in cooperative sales, not the agent and should issue required tax documents the same way! Below are the most frequently asked questions we receive about filing 1099s. Let’s start with our great advice from our accountant: “It never hurts to issue a 1099, or to receive one, even if it is not needed. The trouble lies when you don’t issue a 1099 when you should.”
Do we need to file for a sole proprietor or partnership operating as a DBA?
- You DO need to issue a 1099 MISC to the broker of record of any payments made to a sole proprietorship or partnership.
Do we need to file a 1099 for a CORP?
- You DO NOT have to issue a 1099 MISC to a corporation.
Do we need to file a 1099 to an LLC? It depends on how the LLC is taxed.
- You DO NOT have to issue a 1099 MISC to an LLC that has elected to be taxed as a corporation (C or S corp).
- You DO need to issue a 1099 MISC if the LLC was setup as a single member or partnership that did not elect to be taxed as a corporation.
How do you tell if a broker operates as a sole proprietor, partnership, LLC or Corp?
- All LLC’s and INCs are required to indicate that status in their company name, and should be listed that way in the MLS. If there is no indication you can assume the company is a sole proprietorship or partnership and submit the required 1099. Also, look at the completed W-9 you should have received when issuing the commission. Businesses who pay service providers are required to obtain the W-9 before submitting the year end 1099 reports. That form indicates how the LLC entity should be taxed (C or S corp).
When must I file?
According to the IRS website: Due date for certain statements sent to recipients. The due date for furnishing statements to recipients for Forms 1099-B, 1099-S, and 1099-MISC (if amounts are reported in boxes 8 or 10) is February 15, 2023. This also applies to statements furnished as part of a consolidated reporting statement. See the Guide to Information Returns for due dates for all returns.
REMEMBER THIS GREAT ADVICE FROM OUR ACCOUNTANT:
“It never hurts to issue a 1099, or to receive one, even if it is not needed. The trouble lies when you don’t issue a 1099 when you should.”