I paid a graphic designer over $600 last year to do some work for me. She has an LLC, but is the only employee. Do I need to file a 1099 form?

[JulieH1 · Accepted solution]

If the graphic designer did work for you in your trade or business, then you may need to send her a 1099-Misc depending on how her LLC is formed.  

If you do not have a trade or business, you do not need to send her a 1099-Misc.

You do need to send 1099s to single-member limited liability company (or LLCs) or a one-person Ltd. 

But not an LLC that’s treated as an S-Corporation or C-Corporation. Here’s another way to remember:

• Sole proprietor = Do send 1099
• Unincorporated contractor or partnership/LLP =  Do send 1099
• An LLC that elects treatment as an S-Corporation or C-Corporation = Do NOT send 1099

Alas, there are some exceptions to this rule. You still need to issue 1099s for:

• Attorney’s fees even if the lawyer is incorporated
• Gross proceeds paid to an attorney (such as for legal settlements)
• Payments to for-profit medical care providers

The IRS says that only businesses need to report more than $600 paid for work done.