Editor's note: A question from a NINC member, which arrived too late for the January issue,
prompted this column. While one of the listed filing dates has passed, the information is provided as a
guidance for U.S. writers.
Many self-employed taxpayers fail to properly report their income. While Form 1099s filed by payers help
the IRS determine whether a taxpayer has reported all revenues, many payments that should be reported on
a 1099 are not. Often, payers are not intentionally shirking their reporting requirements. Many are simply not
aware of the requirements or are confused by the rules. Exacerbating the confusion was the recent enactment
and subsequent appeal of expanded reporting requirements.
Tax law generally requires a payer to report payments of rent, salaries, wages, premiums, annuities, compensation,
interest, royalties, pensions, commissions, fees, profits, or other “fixed or determinable gains and
income” if such amounts are related to a trade or business and exceed certain annual thresholds. With such a
seemingly wide rule, it’s easiest to start with items that do not have to be reported.
Payments NOT Subject to Reporting
You do not have to report payments that are personal, such as payments to an independent contractor
who provides landscaping services at your home. Only your business-related payments are subject to 1099
NINC 2012 Profitable Partnerships:
Exploring New Publishing Partnership Opps
Creative Power-Coaching Techniques
Marketing Book Camp
NINCThink: Promotion Planning
Know When to Hold ’Em, Know When to Fold
Stats Are Often Hard to Interpret
Not Your Usual Writing Advice: Exploring Cause
The Mad Scribbler: Your Good Name
Payments to corporations generally do not have
to be reported, though payments to corporations for
legal services are subject to reporting.
Payments for merchandise, phone services,
freight, storage charges, and similar payments are not
subject to reporting. Thus, regardless of cost, there
is no need to report purchases of office supplies or
equipment, or purchases of your books that you plan
Payments made to tax-exempt organizations also
do not have to be reported.
Now let’s talk about payments that are subject to
reporting. Continued on page 3
Page 2 ->