When should a 1099 be issued?

A taxpayer should issue a 1099-MISC form to any person or company that receives more than $10 in royalties or $600 in payments for services, prizes or awards. Any fishing boat proceeds, direct sales of $5,000 in wholesale or other items should also be included, according to the IRS.

In most cases, 1099-MISC forms are not required for C corporations and S corporations. However, if the payments were for medical or health expenses, for attorney's fees, or paid to a federal agency for services, a form is required. These forms are also only required for independent contractors and not regular employees, according to Forbes.