If you make or receive payments in your business, you may have to report them to the IRS on information returns. The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. You must give a copy of each information return you are required to file to the recipient or payer. In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. For more details on information returns and when you have to file them, see the General Instructions for Forms 1099, 1098, 5498, and W-2G (pdf).
Form 1099-MISC
Use Form 1099-MISC, Miscellaneous Income (pdf),
to report certain payments you make in your trade
or business. These payments include the following items.
Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors.
Rent payments of $600 or more, other than rents paid to real estate agents.
Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows.
Royalty payments of $10 or more.
Payments to certain crew members by operators of fishing boats.
You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment.
Form W-2
You must file Form W-2, Wage and Tax
Statement (pdf) to
report payments to your employees, such as wages, tips, and other
compensation, withheld income, social security, and Medicare taxes, and advance earned income
credit payments. For more information on what to report on Form W-2, see the
Instructions for Forms W-2 and W-3 (pdf).
Form 8300
You must file Form 8300, Report of Cash
Payments Over $10,000 Received in a Trade or Business (pdf),
if you receive more than $10,000 in cash in one transaction or two or more related business
transactions. Cash includes U.S. and foreign coin and currency. It also includes certain
monetary instruments such as certain cashier's and traveler's checks and money orders. For
more information, see Publication 1544,
Reporting Cash Payments of Over
$10,000 (Received in a Trade or Business).
Information courtesy of the Internal Revenue Service.
Starting a Business and Keeping Records:
Introduction
What New Business Owners Need To Know
Forms of Business
Identification Numbers
Tax Year
Accounting Method
Business Taxes
Information Returns
Penalties
Business Expenses
Recordkeeping
How To Get More Information
