Instructions For Form 1099-Misc - 2006 (Page 7 of 31) in pdf

Illustrated example. The completed Form 1099-MISC illustrates the following example. Z Builders is a contractor that

subcontracts drywall work to Ronald Green, a sole proprietor who does business as Y Drywall. During the year, Z Builders pays

Mr. Green $5,500. Z Builders must file Form 1099-MISC because they paid Mr. Green $600 or more in the course of their trade

or business, and Mr. Green is not a corporation.

9595

VOID

CORRECTED

PAYER’S name, street address, city, state, ZIP code, and telephone no.

Rents

OMB No. 1545-0115

Z Builders

Miscellaneous

2006

123 Maple Avenue

Income

Royalties

Oaktown, VA 22000

703-123-4567

1099-MISC

Form

Federal income tax withheld

Other income

Copy A

For

Internal Revenue

6 Medical and health care payments

PAYER’S Federal identification

RECIPIENT’S identification

Fishing boat proceeds

Service Center

number

10-9999999

123-00-6789

File with Form 1096.

RECIPIENT’S name

Nonemployee compensation

Substitute payments in lieu of

dividends or interest

For Privacy Act

Ronald Green

and Paperwork

dba/ Y Drywall

Reduction Act

5500.00

Notice, see the

Street address (including apt. no.)

Payer made direct sales of

10 Crop insurance proceeds

$5,000 or more of consumer

2006 General

products to a buyer

Instructions for

456 Flower Lane

(recipient) for resale

Forms 1099,

City, state, and ZIP code

1098, 5498,

Oaktown, VA 22000

and W-2G.

Account number (see instructions)

2nd TIN not.

Excess golden parachute

Gross proceeds paid to

payments

an attorney

15a Section 409A deferrals

15b Section 409A income

State tax withheld

17 State/Payer’s state no.

18 State income

1099-MISC

Form

Cat. No. 14425J

Department of the Treasury - Internal Revenue Service

boat has normally fewer than 10 crew members if the average

Generally, payments made under a flexible spending

arrangement (as defined in section 106(c)(2)) or a

size of the operating crew was fewer than 10 on trips during the

health reimbursement arrangement which is treated as

preceding 4 calendar quarters.

CAUTION

employer-provided coverage under an accident or health plan

In addition, report cash payments of up to $100 per trip that

for purposes of section 106 are exempt from the reporting

requirements of section 6041.

are contingent on a minimum catch and are paid solely for

additional duties (such as mate, engineer, or cook) for which

additional cash payments are traditional in the industry.

Box 7. Nonemployee Compensation

However, do not report on Form 1099-MISC any wages

Enter nonemployee compensation of $600 or more. Include

reportable on Form W-2.

fees, commissions, prizes and awards for services performed

as a nonemployee, other forms of compensation for services

Box 6. Medical and Health Care Payments

performed for your trade or business by an individual who is not

your employee, and fish purchases for cash. Include oil and gas

Enter payments of $600 or more made in the course of your

payments for a working interest, whether or not services are

trade or business to each physician or other supplier or provider

performed. Also include expenses incurred for the use of an

of medical or health care services. Include payments made by

entertainment facility that you treat as compensation to a

medical and health care insurers under health, accident, and

nonemployee. Federal executive agencies that make payments

sickness insurance programs. If payment is made to a

to vendors for services, including payments to corporations,

corporation, list the corporation as the recipient rather than the

must report the payments in this box. See Rev. Rul. 2003-66,

individual providing the services. Payments to persons

which is on page 1115 of Internal Revenue Bulletin 2003-26 at

providing health care services often include charges for

injections, drugs, dentures, and similar items. In these cases

the entire payment is subject to information reporting. You are

Exceptions. Do not report in box 7, nor elsewhere on Form

not required to report payments to pharmacies for prescription

1099-MISC, the cost of current life insurance protection (report

drugs.

on Form W-2 or Form 1099-R); an employee’s wages, travel or

auto allowance, or bonuses (report on Form W-2); or the cost of

The exemption from issuing Form 1099-MISC to a

group-term life insurance paid on behalf of a former employee

corporation does not apply to payments for medical or health

(report on Form W-2).

care services provided by corporations, including professional

corporations. However, you are not required to report payments

Self-employment tax. Generally, amounts reportable in box

made to a tax-exempt hospital or extended care facility or to a

7 are subject to self-employment tax. If payments to individuals

hospital or extended care facility owned and operated by the

are not subject to this tax and are not reportable elsewhere on

United States (or its possessions), a state, the District of

Form 1099-MISC, report the payments in box 3. However,

Columbia, or any of their political subdivisions, agencies, or

report section 530 (of the Revenue Act of 1978) worker

instrumentalities.

payments in box 7.

MISC-5

Instructions For Form 1099-Misc - 2006 Page 7

Related Articles

Related forms

Related Categories