As a San Diego CPA we come across a common issue with businesses not providing a 1099-misc to their attorney. Do you have to prepare a 1099-MISC form for your attorney? If you are unsure about this, you are in the right place. To save you time if you are in a rush, though; the answer is most certainly yes!
If you had to pay your attorney $600 or more then you will have to file a form to make sure everything is above board. Besides keeping yourself right in a taxation process it also means that your attorney can sleep easy knowing that everything they need filed has been.
If you are unsure about filing a 1099 then you have to look at the fee. If it was over the amount stated above, then you absolutely must put this through. A failure to do so leaves you looking as if you are trying to hide something or you don’t want to be as open as you can about what – and how – you spend your money.
It’s a common problem and one that can leave you looking a little uncertain in the eyes of the authorities. To avoid this, you need to work out if you should 1099 your attorney. If you don’t then you can look forward to a nice penalty in the post. These are the kind of rules that the IRS has operated with for some time – there’s no way of getting out or around making this form clear to the government.
Again, it’s 100% your responsibility to make this happen. The government are not asking for your attorney to put the 1099 through; they are asking you to do it instead. Don’t mess around and get the 1099-MISC filled out as fast as you can. Continually leaving it is likely to make it harder for you to get the solutions you need later, as you’ll be involved in a tax dispute with the IRS.
A 1099 has to be reported purely on the basis that an attorney will always be classed as a service that you paid for. Given that it’s pretty hard to get an attorney that will take less than $600, the chances of you not having to file one is going to be pretty slim.
Keep this in mind to save yourself any disputes and reduce IRS red flags.