1099-NEC Boxes 5-7

Forum|Forum|1 year ago
January 25, 2025
1 reply
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I am a new small business owner in California and my partner and I have contrary understanding regarding Boxes 5-7 of form 1099-NEC. We paid a lawyer $2,700 to prepare agreements for us last year and did not remit any tax to the state as withholding. So, my understanding is that we would leave boxes 5-7 blank - they are listed as optional for the IRS.

He believes we need to leave box 5 blank (so this is agreed), fill in box 6 with "CA ##-#######" (our EIN), and box 7 with $2,700 since it is subject to state income tax.

Can someone help me understand? Must we fill this in because it is information that the lawyer needs to prepare their tax - is that how it works?

[This year, definitely getting a CPA if the business takes off 🙂 ]

Thank you so much!

Not A Product Question

VolvoGirl

Employee

Are you preparing the 1099NEC? You might not need to give the lawyer a 1099NEC at all.

rjc27Author

Hi @VolvoGirl ! Thanks for your quick response. I was indeed preparing the 1099-NEC. How would I know for sure whether I need to issue it?

I expected I would need to because it was $600 or more, they are in the US, and it was legal advice. But now that you mentioned this, I checked and we made the payment via credit card. Should I verify with my credit card company if they will issue a 1099-K?