Payments to attorneys. The term “attorney” includes a law firm or other provider of legal services. Attorneys' fees of $600 or more paid in the course of your trade or business are reportable in box 7 of Form 1099-MISC, under section 6041A(a)(1).

Angelyn_T

Moderator

Hello everyone.

Allow me to join the thread and help share additional information about fees paid through credit card.

Payments made through credit card are reported to the Form 1099-K. Credit card payments won't be reported to the Form 1099-Misc.

For additional reference, you may check this article: Payment Card Transactions FAQs.

Our doors are always open here in the Community. Feel free to add a comment below if you have any other concerns about Form 1099. I'm always here to help!

qbteachmt

Level 11

For Law firms and attorneys, read the info for Box 14 and Box 7. All Attorneys are reported, even if they are operating under a Corporate structure.

Get the 1099-Misc Instructions package from the IRS website. That's your Best Resource. Not a QB user forum.

Credit Card Payments fall under the 1099-K rules. Not the 1099-Misc rules.

M

maven1129

"2. Lawyers are exempt from receiving 1099. If you issued one to a lawyer you could be fined for issuing a fraudulent 1099"

This is hugely wrong and misleading - lawyers are the one case you MUST send a 1099 regardless of corporate structure. I think you need to back up where you are getting this info and correct the mistake for the benefit of anyone reading this post.

M

maven1129

2. Lawyers are exempt from receiving 1099. If you issued one to a lawyer you could be fined for issuing a fraudulent 1099

This is hugely wrong and misleading. Lawyers are always reported. I would appreciate you updating your post to clarify where you got this info and to correct it if you are in fact wrong like the rest of the community seems to think.

C

cbcavnar

Payments to lawyers are confusing. With 2 different 1099's it has actually cleared it up slightly:

- 1099-NEC - ALL payments to attorneys for fee services are reported in Box 1. Regardless of their corporate status. Only exception would be if they were paid by credit card, in which case they will receive a 1099-K from the CC company.

- 1099-MISC - Attorney payments that are part of a settlement or lump sum are reported in Box 10. NOT their 'hourly' fee services.

And if you "over-report" on a 1099, it is always easy to fix with a corrected 1099, and often just a promise not to do it again. Sending one to an attorney is NOT dangerous, except for the attorney who will have to report the income and pay taxes!

B

BWay

@cbcavnar

Assuming payments are not made by credit card, when you say "ALL payments to attorneys for fee services are reported", does this mean even if the total amount for the year is less than the $600 Box 1 Threshold? For example, we paid a law firm about $381 by check for fees last year. Do I need to report that amount on a 1099-NEC, Box 1 or do I not need to send a 1099 at all because the amount does not meet the threshold of $600?

Thanks!

C

cbcavnar

Lawyers? You are SO WRONG!

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Tuckerestesaccounting

Completely incorrect.
I honestly cannot believe QuickBooks is allowing you to keep your comment up. Per IRS code all fees paid from a business to an attorney must be reported to the attorney in 1099 Box 7. No matter how the law firm is structured. They must receive a 1099.. Ifyou do not believe me take the time to read the IRS code yourself. https://www.irs.gov/pub/irs-pdf/i1099mec.pdf

B

BWay

Hi @Tuckerestesaccounting

Y'know, this stuff is super confusing. I think what we are discussing here is what amounts and what kind of payments are reportable on a 1099-NEC or 1099-MISC, not how the attorney's firm is structured. I think the argument to exclude payments by credit card from Box 1 of a 1099-NEC for attorney's fees (or most other payments to other vendors on the 1099-NEC) is supported by those payments needing to be reported on a 1099-K by the processing companies. You can see this information in the same 2024 Instructions for 1099-MISC and 1099-NEC booklet you attached to your post, under the "Exceptions" instructions in the middle of page 9 under "Form 1099-K".

B

BWay

Also, in looking back to the originating date of this post (2019), some of the information contained in the questions, comments and replies MAY not be 100% accurate now as things that were reported on a 1099-MISC have now changed and some of those items are now being reported on the 1099-NEC instead.

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