I became a successor trustee in October and requested an EIN for the revocable-gone-irrevocable trust at that time. "The trust" paid a lawyer several thousand for assistance reading through everything and contacting beneficiaries, etc. Was I supposed to file a 1099-NEC for the attorney fees paid by the trust?? I'm not sure since it's a trust but has the business EIN, and I just now learned about this form.
Follow-up #1 - is there a separate California form I was supposed to file, and is there a separate state penalty to pay?
Follow-up #2 - how do I calculate the late fee I owe to the IRS/CA for not filing in time? (Edit: I believe it is $120 to the IRS if I file by August, if my research is correct - but I'm not sure how to pay this penalty, do I mail it in with the form?)
Thank you.
Unfortunately, Attorney's fees are one of the requirements for a 1099-NEC. You'll need to file it as soon as possible since you paid the attorney more than $600 in the calendar year.
Often the IRS doesn't issue late fees for filing 1099s unless the person receiving the 1099 complains. So file it quickly and then wait to be notified before you pay any penalties.
Here is where to file 1099-NECs with TurboTax.
California also requires the 1099-NEC be filed with them. TurboTax can handle that as well.
@RobertB4444 thank you!
I was getting such conflicting information online because it kept saying that businesses had to fill out 1099-NECs but I wasn't sure if the trust was considered a type of "business" even though it has an EIN like a business does!