Form 1099-MISC Frequently Asked Questions


 

Why is choosing the correct object code important?
  1. Services being performed in the US are reportable to the IRS on the Form 1099-MISC.
  2. Financial and tax reporting is determined by object codes.
  3. If IU fails to report to the IRS the university can be fined up to $260 per return.
Where do I find “reportable object codes”?

You will find a list of reportable object codes  on the FMS University Tax Services website:  FMS Reportable Object Code Listing. If not sure which object code to use, please contact taxpayer@iu.edu with a description of your payment and University Tax Services can assist.

How do I know which object code to pick?
  1. First, decide if you are paying for a service or a good.  We only report to the IRS if payment is for a service.  A payment for goods is not reportable to the IRS.
  2. Are you paying for a service? (Use a reportable object code) FMS Reportable Object Code Listing
    1. Individual or company is being paid to perform an activity.
    2. It is intangible, therefore it cannot be touched.

                                                     i.     Examples: 

        • Catering service- Hiring a company or individual to cater a conference.  Preparing, delivering and serving the food is considered a service. 
        • Photography- Hiring a company or individual to photograph an event is a service.
        • If we pay to access a database on line, we have the right to use, but do not own the database, we have purchased a service

       3. Are you paying for a good? (Do NOT use a reportable object code)

    1. A good can be a tangible, material object, sometime referred to as property, or raw materials
    2. An intangible good is not physically tangible, but is digital, downloadable or virtual.
    3. A purchase of a good assumes ownership that can be transferred.

                                                     i.     Examples:

        • If you buy a food tray from the grocery for your conference, you have purchased a good.
        • Purchasing a photo from the photographer is a good
        • If we pay for a digital book, with the right to use indefinitely (Kindle), we have purchased an intangible good.

      4. Are you paying for both a service and a good?

If both goods and services are being paid for, a breakout on the invoice  should be requested between services and goods from the vendor and the rules above would apply for object code use - see link below.

                                                     i.     Examples:

        • Paying for repairs and maintenance.  If we need new tires on the vehicles we own, we pay for the service (replacing the tires) and for goods (the new tires).
        • Goods and Services help Link: Goods and Services Flow Chart
What if I can’t find an object code that best describes my payment?

Select object code 4500 Contractual Services, and it will be reviewed before year end by University Tax for proper classification and contact taxpayer@iu.edu for assistance.

Can I use miscellaneous expense if I am uncertain about the object code?

No, as this may result in improper tax reporting and classification. If unsure, email taxpayer@iu.edu.