Form 1099-MISC Frequently Asked Questions
- Services being performed in the US are reportable to the IRS on the Form 1099-MISC.
- Financial and tax reporting is determined by object codes.
- If IU fails to report to the IRS the university can be fined up to $260 per return.
- First, decide if you are paying for a service or a good. We only report to the IRS if payment is for a service. A payment for goods is not reportable to the IRS.
- Are you paying for a service? (Use a reportable object code) FMS Reportable Object Code Listing
- Individual or company is being paid to perform an activity.
- It is intangible, therefore it cannot be touched.
- Catering service- Hiring a company or individual to cater a conference. Preparing, delivering and serving the food is considered a service.
- Photography- Hiring a company or individual to photograph an event is a service.
- If we pay to access a database on line, we have the right to use, but do not own the database, we have purchased a service
3. Are you paying for a good? (Do NOT use a reportable object code)
- A good can be a tangible, material object, sometime referred to as property, or raw materials
- An intangible good is not physically tangible, but is digital, downloadable or virtual.
- A purchase of a good assumes ownership that can be transferred.
- If you buy a food tray from the grocery for your conference, you have purchased a good.
- Purchasing a photo from the photographer is a good
- If we pay for a digital book, with the right to use indefinitely (Kindle), we have purchased an intangible good.
4. Are you paying for both a service and a good?
If both goods and services are being paid for, a breakout on the invoice should be requested between services and goods from the vendor and the rules above would apply for object code use - see link below.
- Paying for repairs and maintenance. If we need new tires on the vehicles we own, we pay for the service (replacing the tires) and for goods (the new tires).
- Goods and Services help Link: Goods and Services Flow Chart
Select object code 4500 Contractual Services, and it will be reviewed before year end by University Tax for proper classification and contact firstname.lastname@example.org for assistance.
No, as this may result in improper tax reporting and classification. If unsure, email email@example.com.