Do Nonprofits Need To Do 1099s?

Do nonprofits need to do 1099s?

Yes! Nonprofits must file 1099s, just like anyone else. Kind of like a W-2, a 1099 is how you notify an employee of how much money they made, a 1099 is a tax form that lets people know other sources of income, such as contractor income.

There are many different types of 1099 forms. These variants are based on the income source. Here are just some of the more common ones:

The 1099-Misc is probably the most relevant one for you. Nonprofits will need to fill out a form 1099-MISC for persons, vendors, subcontractors, independent contractors, and others in the following circumstances:

$600 or more per year is paid for:

• cash payments to fishermen
• crop insurance proceeds,
• medical and health care payments,
• prizes and awards,
• proceeds paid to attorneys,
• rents,
• services (including parts and materials), and
• other types of payments not covered by another information reporting document.

1099s need to be mailed by January 31, so don’t wait. You can purchase the necessary forms at Office supply stores, like Office Depot or Office Max, or use Aplos Accounting to make it easy.

** Note – A 1096 will need to be filed with the government as well, which is basically a list of all the 1099s you sent out. Typically when you buy a pack of 1099s from the store it will come with the 1096 and instructions.

Aplos Academy discusses church accounting, nonprofit accounting, Form 990, fundraising, and guides for using Aplos software. Take a look around and subscribe to get new articles by email. All articles are the property of the author. © Permission granted to post articles in their entirety if credit to author and link to www.aplos.com/academy is also included.

Good luck and remember this academy is not meant to be a substitute for professional services, just a helpful resource. Always consult a CPA or trusted professional if you seek tax or accounting advice.