1099s For Lawyers
This is a guest post by Jill Ulett of Accounting Girl, LLC
Although you are not required to send 1099s to corporations, there is an IRS requirement to send 1099s to all attorneys regardless of their corporate status. There are two different ways to complete the 1099 depending on how the attorney/firm was paid, and the addition of the form 1099-NEC makes it slightly more confusing. Let’s demystify and simplify the process:
- Any payments made to an attorney for general legal services and expenses must be reported on form 1099-NEC in Box 1. This is the most common reporting.
- If the attorney was paid gross proceeds from a settlement distribution, those funds will be reported on form 1099-MISC in Box 10.
Please note that forms are due to the recipient by January 31st, and to the IRS by February 28th (March 31st if filing electronically).
Additional notes on forms 1099-NEC and 1099-MISC:
- Forms can be filled out manually; they are not required to be typed or in electronic form.
- You are only required to submit a 1099 for payments made via cash and check. If you paid an attorney via credit card, the credit card company will report the payments on a separate 1099.
- The total amount reported will be the total amount paid to the attorney; it would not need to be broken down by fees and expenses.
Jill Ulett, owner of Accounting Girl, has over 20 years experience as an accountant. She believes that financial management is like a puzzle; put the pieces together correctly and you get a picture that tells the perfect story about your business. Jill not only puts the puzzle together, but helps you understand the meaning behind the story.
We at G & G Law are continually impressed with her acumen, professionalism, and ability to make accounting approachable. She and her team have made our numbers make sense, cleaned up our books, and moderated the ever-present anxiety that exists around financials.