Form 1099-MISC under $600 isn’t mandatory by the Internal Revenue Service. As someone who paid miscellaneous income to someone that doesn’t exceed $600, you don’t need to file the 1099-MISC.
Forms 1099-MISC are filed for many reasons. The following types of payments that exceed $600 during the tax year are reported with a 1099-MISC.
- Any miscellaneous income payment
- Medical and health care payments
- Payments to an attorney
- Crop insurance proceeds
- Prizes and awards
- Rent payments
- Cash payments for aquatic life (fish) purchased from someone or businesses trading fish or catching fish
- Fishing boat proceeds
- Other income payments
If any of the above payment is made, but not more than $600, the filer isn’t expected to file it.
While this is simple and easy for the filers of the form, the person who received payment must report it on their tax returns. Since they may find it challenging to report income earned without the proper information returns, consider filing 1099-MISC even under $600.
A taxpayer who did not receive Form 1099-MISC, whether the amount earned is over or under $600, is required to report it on their tax returns. There is no threshold for reporting income earned. That said, even if you earned less than $600, you must report it when you prepare your federal income tax return. You can use Schedule 1 to report the income earned on Line 8, Other Income.