Skip to main content
Level 3
February 10, 2021
Solved

Schedule C Payments Requiring a 1099

  • February 10, 2021
  • 1 reply
  • 0 views

I'm confused where the Schedule C asks if I made any payments that would require me to send a 1099.  I found on the IRS site:  "If you paid someone who is not your employee, such as a subcontractor, attorney or accountant $600 or more for services provided during the year, a Form 1099-NEC needs to be completed, and a copy of 1099-NEC must be provided to the independent contractor by January 31 of the year following payment. You must also send a copy of this form to the IRS by January 31."

 

Reading the instructions for the 1099-NEC, it says merchandise is excluded in this, however what if I sell on-demand things like books that I have manufactured and sent to customers directly?  For example, I have used this site to send a book I made "on-demand":  https://www.publishingxpress.com/.  So, even though I am buying merchandise ultimately, they are providing the service of manufacturing the merchandise for me.  But, it would seem odd because everyone who uses that site would seemingly have to issue a 1099-NEC to that site if they paid $600 for their services?  Wouldn't the sites own payment handler send them a 1099 form if they make a certain amount? 

Best answer by AnnetteB6

The situation you described would not require you to send a Form 1099-NEC to the company manufacturing the books that you sell.  

 

The key is that the company manufacturing the books is not an independent contractor doing work for your Schedule C business.  

1 reply

AnnetteB6Answer
Level 15
February 10, 2021

The situation you described would not require you to send a Form 1099-NEC to the company manufacturing the books that you sell.  

 

The key is that the company manufacturing the books is not an independent contractor doing work for your Schedule C business.  

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"
genie187Author
Level 3
February 10, 2021

Thanks for replying.  So, how do you determine whether they are or not?

Level 10
February 10, 2021

Form 1099-NEC is used for payments you have made to persons not companies.  It is not used to report payments for merchandise.  See the Exceptions to reporting for Form 1099- NEC