Condo Media - January 2025 - 16

ASKED & ANSWERED
Avoiding Penalties
When to File Forms 1099-NEC and
1099-MISC - and What's Involved
As a new board treasurer, I'm looking for guidance on fi ling
Form 1099-NEC and Form 1099-MISC - specifi cally, to whom do
I send which form, how do I fi ll out the form, and when is it due?
And what are the penalties if I don't fi le?
While most people are
aware that income tax returns
must be fi led annually, many,
especially those new to the
THIS ANSWER WAS
PROVIDED BY
Eric J.
Fudeman,
CPA
A PARTNER OF
BLOOM COHEN
HAYES LLC AND
A MEMBEROF THE
CONDO MEDIA BOARD.
accounting function of their community,
will fi nd that information reporting requirements
have diff erent rules and deadlines.
One common information reporting
requirement for associations is the fi ling of
Form 1099-NEC or Form 1099-MISC.
According to Internal Revenue Service
(IRS) instructions, both must be furnished
by Jan. 31 and fi led with the IRS by Feb. 28
(March 31 if fi ling electronically).
Form 1099-NEC stands for " non-employee
compensation, " which is what most
use to report payments made to vendors for
services. 1099-MISC, which stands for " miscellaneous, "
is used to report payments that
are not subject to self-employment tax, like
rent payments. The remainder of the article
will focus on 1099-NEC fi lings, since this is
the form most will be preparing for services
provided by vendors.
FORM 1099-NEC FILING
Filing Form 1099-NEC fulfi lls the requirement
to report to the IRS what your association
paid certain vendors during the year.
Typically, you report annual payments over
$600 that the association made to a vendor
16 CONDOMEDIA January 2025
who provided services to the association.
Examples of such vendors would be a management
company, a plumber, an electrician, a
landscaper, or a fi nancial services professional.
The IRS uses this reporting to track income
received by businesses and individuals.
The IRS can then match the income amount
reported by the association with the total
income reported by the vendor on their tax
return and see if there are any discrepancies.
If the association paid a vendor $600 or
more for services during the year and that
vendor is not incorporated (not a C-Corp
or S-Corp), then the vendor may need to
receive a 1099-NEC from the association.
However, if a vendor only sold products
or supplies to the association, then a
Form 1099-NEC is not required to be fi led.
Most associations will issue Form 1099NEC
to vendors for services performed.
It is good practice to request that vendors
complete and return a Form W-9 (a one-page
PDF) to the association when you engage
them to perform services. The W-9 collects
basic information, which you will need when
you fi le the 1099-NEC in January, such as
vendor name, address, type of entity (whether
they are incorporated), and the vendor's tax
identifi cation number.
If you are fi lling out the 1099-NEC yourself,
be sure to refer to the IRS instructions.
Condo Media - January 2025

Table of Contents for the Digital Edition of Condo Media - January 2025
