- January 7, 2015
1099-MISC Box-7 – Nonemployee Compensation- when an employer pays or compensates or spends a minimum of $600 or more to the consultants or independent contractors who are not employees under him who all could be the service providers during the course of the business for which the payments of $600 or more paid or transacted. The consultant, Independent contractor, service provider, or non-employee could be the receiver of $600 or more for services done as an individual, partnership, estate, or corporation including Government agencies or 1099 non-profit organizations.
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Services that are rendered in a non-employee capacity are subject to self-employment tax and include payments made to board-of-director chair holders, attorneys performing services directly for the payee, taxable fringe benefits, and expense reimbursements.
Additionally, payments are made for an exchange of services between entities in the course of trade or business, including barter exchanges. Other payment types include golden parachute payments which mean substantial benefits given to a top executive in the event that the company is taken over by another firm and the executive is terminated as a result of the merger or takeover. Oil and gas working interests, fish purchases for cash, commissions for lottery ticket sales agents. The corporate exemption does not apply to attorney fees, fish purchases for cash, or payments made by a federal executive agency. The standard $600 reporting threshold applies to medical and healthcare payments made to service providers.
1099-MISC Box-9 -Payer Made Direct Sales of $5000 or more includes payments made by door-to-door salespersons, online sellers, telemarketers, direct mailers, and so on. One should not enter a dollar amount in this box. The minimum reporting threshold for this box is $5,000 in annual payments.
