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We have a contractor who worked for us for 3 months(oct, nov, dec). Since his december 2011 pay check was lost in mail , we resent him another check in january 2012 (dated in january) although the payment was for december. When we file the 1099 misc, do we inlcude this payment for december although it was dated and cashed out in january or should it be for january 2012 (filed in next year 1099 misc) |
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You should use the constructive receipt rules to determine which period to report the payment in. When did you really give up control of the money so that he had actual use of it - 2011 or 2012. I can't help but be curious when I see posts like yours. First you say you hired a contractor, then you talk about his Pay Check. Maybe I'm making the wrong assumption, but contractors don't get paychecks, employees do. Contractors get payments. Maybe I'm splitting hairs, but it helps to make sure we're all on the same page. You only have to issue a 1099 IF you pay an unincorporated entity $600 or more for work they did for your TRADE OR BUSINESS. So first, you have to be in business to issue the 1099. Are we to assume you are in business? If so, remember you only have to issue the 1099 to an UNINCORPORATED entity - LLC, Partnership or Sole Proprietorship. You are not REQUIRED to issue a 1099 to a corporation - BUT we usually recommend that the be issued IF, and only if, other 1099s have to go out too. There is so much abuse and confusion with the filing of 1099-MISC forms. Hopefully this will improve because of the 1099 checkboxes on Schedule C for 2011. So speaking of splitting hairs, a entity that is TAXED as a corporation does not need to be issued a 1099-MISC (this could even be an LLC that has elected to be taxed as a corporation). Also, a corporation could elect to be TAXED as an LLC, and should therefore get a 1099. So simplify the process of analyzing all payments for services by getting Forms W-9 signed by all vendors which will guide you to determining if a 1099 is required.
(02 Feb '12, 14:45)
Bill-EA
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The second check replaced the lost one, and the second check should be treated as a "non-event" as far as a deduction and 1099ing and all that is concerned. The "contractor" however, might claim that he didn't receive anything in the prior year. That's his problem, not yours. If the original "paycheck" was mailed to him in December, that amount should be included in his 1099 for the prior year. |
