{"id":1836,"date":"2014-09-08T02:56:55","date_gmt":"2014-09-08T07:56:55","guid":{"rendered":"http:\/\/agrilife.org\/texasaglaw\/?p=1836"},"modified":"2026-04-17T15:32:03","modified_gmt":"2026-04-17T20:32:03","slug":"when-farmers-and-ranchers-need-to-issue-a-1099-form","status":"publish","type":"post","link":"https:\/\/agrilife.org\/texasaglaw\/2014\/09\/08\/when-farmers-and-ranchers-need-to-issue-a-1099-form\/","title":{"rendered":"When Farmers and Ranchers Need To Issue a 1099 Form"},"content":{"rendered":"

Recently at the Texas A&M University Beef Cattle Short Course, accountant Jared Hartman with the firm Seidel, Schroeder & Co. discussed the requirements for 1099 forms.\u00a0 The discussion caused some surprise among the audience of cattle producers about when this form is required.\u00a0 In light of that, I did some research on the subject and wanted to share.<\/p>\n

\"swather\"<\/a><\/p>\n

When Are 1099 Forms Necessary?<\/strong><\/p>\n

Under IRS regulations, a 1099 form should be issued\u00a0to certain non-employees\u00a0who perform services and are paid\u00a0over $600 in a calendar year.\u00a0This requirement can be broken down into\u00a03 elements:\u00a0 (1) $600 or more paid during the calendar year; (2)\u00a0to\u00a0someone who\u00a0is\u00a0an individual, LLC, partnership, or trust; and\u00a0(3) for services.\u00a0 Let’s discuss each element.<\/p>\n

* $600 or more paid during the calendar year.<\/em><\/p>\n

This is a cumulative amount, meaning that if total payments for a calendar year are more than $600, a 1099 form is necessary.\u00a0 This would include a one-time payment of $650, for example, or ten payments of $65.<\/p>\n

* To an individual, LLC, partnership, or trust.\u00a0<\/em><\/p>\n

This element was surprising to several producers in attendance at Beef Cattle Short Course who were under the impression that LLCs and partnerships were exempt from the 1099 requirement.\u00a0 That is not the case.\u00a0 If the payee is a corporation, then no 1099 needs to be issued, but for other business entities, including LLCs, partnerships, and trusts, 1099s are required.<\/p>\n

* For services.<\/em><\/p>\n

Services include farm-related work such as shredding, hay hauling, day work with cattle, tax preparation,\u00a0business related attorney’s fees,\u00a0equipment repairs, custom harvest or farming work, and pasture rents.\u00a0 This means if you are a tenant leasing pasture or farmland from a landowner for more than $600, a 1099 should be provided to the landowner each year.\u00a0 Likewise, if you hire someone to bale hay\u00a0for $600, a 1099 is required.\u00a0 Finally, if you pay more than $600 to a veterinarian, attorney, or accountant a 1099 is required.<\/p>\n

There are certain activities for which a 1099 is not required, including hauling or storage\u00a0of grain or livestock and the purchase of seed, fertilizer, chemicals, fuel and other non-service items.<\/p>\n

Timing of Issuance of 1099 Form.<\/strong><\/p>\n

1099 forms are due to the recipient by January 31 the year after the work is done.\u00a0 Thus, for services performed in 2014, 1099’s are due by January 31, 2015.\u00a0 The 1099 forms are due to the IRS by February 28 (if paper filing) or March 31 (if e-filing).<\/p>\n

Importantly, in order to issue the 1099 Form, the farmer or rancher must obtain the necessary information from anyone performing services.\u00a0\u00a0 Thus, is it recommended that prior to paying someone for services, you obtain their name, mailing address, and social security number\/tax identification number, all of which will aid in 1099 preparation and dissemination.\u00a0 All necessary information can be obtained by requiring the person to require a W-9 form<\/a>, which may be an easier method than trying to remember to collect each necessary piece of information.<\/p>\n

Penalties Imposed for Failure to Issue 1099 Forms.<\/strong><\/p>\n

If someone fails to send out 1099 forms in accordance with these regulations, he or she could face monetary penalties.\u00a0 Penalties for failure to file range from $30-$100 per 1099 for late filings or up to $250 per 1099 for intentional disregard.<\/p>\n

Additional Information.<\/strong><\/p>\n

All producers should speak with their accountant to discuss the necessity of 1099 forms for their individual operation.<\/span><\/p>\n

Here are links to articles with additional discussion of these regulations.<\/p>\n

Farm Doc Daily Not All Payments Require a Form 1099<\/a><\/p>\n

iGrow Tax Topics:\u00a0 IRS 1099 Forms for Agriculture Producers <\/a><\/p>\n

Ohio State University Extension 1099 Forms for Agriculture <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Recently at the Texas A&M University Beef Cattle Short Course, accountant Jared Hartman with the firm Seidel, Schroeder & Co. discussed the requirements for 1099 forms.\u00a0 The discussion caused some surprise among the audience of cattle producers about when this form is required.\u00a0 In light of that, I did some research on the subject and wanted to share. When Are 1099 Forms Necessary? Under IRS regulations, a 1099 form should be issued\u00a0to certain non-employees\u00a0who perform services and are paid\u00a0over $600 in a calendar year.\u00a0This requirement can be broken… Read More →<\/a><\/span><\/p>\n","protected":false},"author":2444,"featured_media":1924,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[35],"tags":[],"class_list":["post-1836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-issues"],"acf":[],"yoast_head":"\nWhen Farmers and Ranchers Need To Issue a 1099 Form - Texas Agriculture Law<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/agrilife.org\/texasaglaw\/2014\/09\/08\/when-farmers-and-ranchers-need-to-issue-a-1099-form\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When Farmers and Ranchers Need To Issue a 1099 Form - Texas Agriculture Law\" \/>\n<meta property=\"og:description\" content=\"Recently at the Texas A&M University Beef Cattle Short Course, accountant Jared Hartman with the firm Seidel, Schroeder & Co. discussed the requirements for 1099 forms.\u00a0 The discussion caused some surprise among the audience of cattle producers about when this form is required.\u00a0 In light of that, I did some research on the subject and wanted to share. When Are 1099 Forms Necessary? Under IRS regulations, a 1099 form should be issued\u00a0to certain non-employees\u00a0who perform services and are paid\u00a0over $600 in a calendar year.\u00a0This requirement can be broken... 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