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jodimann
Returning Member

Do I need to file a 1099nec or 1099misc or something different?

My business helps patients get their medical marijuana card.  We work with a doctor who provides the doctor's evaluation for the patients.  The doctor is not our employee.  The patient pays us for our service and the doctor's evaluation in one payment and then we pass the doctors fee to the doctor.  Do we need to do a 1099 form of some sort for the doctor or something different?

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4 Replies
ColeenD3
Expert Alumni

Do I need to file a 1099nec or 1099misc or something different?

Yes, since you have a business, you must include the payments you send to the doctor on an official reporting form. Please see this LINK for more information.

 

Form 1099-MISC

According to the IRS, beginning with tax year 2020, you should file Form 1099-MISC for each person to whom you have paid the following in the course of your business during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in the following:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Generally, cash from a notional principal contract to an individual, a partnership or an estate.
    • Any fishing boat proceeds.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Payments to an attorney.
    • Section 409A deferrals.
    • Nonqualified deferred compensation.

 

 

 

jodimann
Returning Member

Do I need to file a 1099nec or 1099misc or something different?

Thank you for your quick response.  Just for my clarification, I also asked this question on another site...they suggested a 1099NEC. 

I am not paying anyone's medical or health care payments, we are paying the Doctor for performing her part of the service to a mutual patient.   So just double checking...you think at 1099Misc rather than a 1099NEC?

RayW7
Expert Alumni

Do I need to file a 1099nec or 1099misc or something different?

 

I agree, 1099-NEC would be the best choice.

 

The IRS explains that, in general, you must report payments you make if they meet the following four conditions:

  1. The payment is made to someone who is not your employee
  2. The payment is made for services in the course of your trade or business
  3. The payment is made to an individual, partnership, estate, or corporation
  4. The payment total is at least $600 for the year

Additionally, businesses will need to file Form 1099-NEC

  • when they pay an individual at least $10 in royalties, or
  • if the business has withheld any federal income tax under the backup withholding rules regardless of the amount of payments for the year to the nonemployee.

Nonemployee compensation can include:

  • Fees
  • Benefits
  • Commissions
  • Prizes and awards for services performed by a nonemployee
  • Other forms of compensation for services performed for your trade or business by an individual who is not your employee

Do I need to file a 1099nec or 1099misc or something different?

Before you do anything, you need to have the doctor's office complete form W-9 so you have this on file.

Next, after reviewing the responses to the W-9, this will dictate whether or not you are required to issue any form 1099.  You may not need to depending on what type of entity the doctor is part of.

https://www.irs.gov/pub/irs-pdf/fw9.pdf

 

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
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