Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Filing 1099s for non-profit
Posted by: DeeDee, November 27, 2005 05:35AM
I'm helping a non-profit file taxes and have been trying to determine just what businesses need Form 1099s from this non-profit at year-end.

Can someone verify that any person or business (as long as it's not a corporation) that receives $600 or more during the year for services rendered or a combination of goods and services needs to receive a Form 1099 from the non-profit corporation?

I have read through the IRS Instructions and this is how I interpret how the IRS rules apply to this non-profit. If I'm off course, please clarify. Thanks

Re: Filing 1099s for non-profit
Posted by: Art, November 27, 2005 05:45AM
You've got it. Give them a W-9 form to fill out, and if they are corporations they will say so on the form itself.

Also I would file a 1099 for a medical or legal organization including corporations.

If you've not done this before, or even if you have, file the original red-colored form with the IRS and use a red-colored 1096 to transmit the 1099s to the IRS.

Re: Filing 1099s for non-profit
Posted by: DeeDee, November 27, 2005 06:33AM
Thanks, Art.

Just one more question...

The non-profit corporation has a fiscal year that ends on July 31st. I assume that all Form 1099s should be filed strictly by calendar year, correct? Also, some of the businesses were under contract and paid at intervals. I assume that the Form 1099 should state the actual cash paid during the calendar year even though the contracted amount may be paid some in 2005 and some to come in 2006. Thanks very much.

Re: Filing 1099s for non-profit
Posted by: Helen, EA in PA, November 27, 2005 03:45PM
Calendar year is correct for your filings. You only report what you paid the contractor in 2005. You will issue another 1099 for 2006 payments.


Helen, EA in PA

Re: Filing 1099s for non-profit
Posted by: DeeDee, November 27, 2005 10:03PM
Thank you, Helen and Art for your help with this!

Re: Filing 1099s for non-profit
Posted by: DeeDee, January 4, 2006 05:26AM
Art or anyone else,

What about a LLC? Is this the same as a corporation with regard to sending a Form 1099?

I followed the advice given here and sent a request for a completed
W-9 to each vendor/contractor who had been paid $600 or greater. One W-9 was returned with 'LLC' marked as "Other" where the form (W-9) requests the form of organization. Another form was returned without any box checked (i.e. no form of organization designated).

Any advice?

Re: Filing 1099s for non-profit
Posted by: Art, January 4, 2006 06:03AM
While you do not have to issue a 1099-Misc to a corporation, other than a legal or a health services corporation, an LLC is not a corporation for this purpose, and would still be issued a 1099. This is true even if the LLC files its own tax returns as a corporation.

Re: Filing 1099s for non-profit
Posted by: DeeDee, January 4, 2006 06:33AM
Art, you are wonderful. Thanks for your quick response! I think I will send a Form 1099 to the vendor who failed to designate their type of organization, too. Do you agree?

Re: Filing 1099s for non-profit
Posted by: Art, January 4, 2006 06:42AM
Sure.

Look, it can't hurt.

Even if this is a bona fide corporation, it's going to be reporting this income anyway, and it won't identify the payer when it files its taxreturn, so it shouldn't have any concern of having received the form. But if their W-9 states they are a corporation (not legal or health services) then you are off the hook, and need not send them a 1099.

Only someone who is, um, reluctant(?) to report income would be bothered by a 1099.



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