The April 15 deadline for filing our taxes is a good reminder to review what payments need to be tracked and reported on 1099s.

The most common payments that you’ll need to issue 1099s for are consulting or other professional services that non-employees perform for your organization, and rent that you pay to a landlord. These are reports on a 1099-MISC, in boxes 7 and 1, respectively. Your accounting system should be able to produce and print 1099s but make sure you’re tagging the payments correctly during the year so you have the annual totals ready when you have to file the forms.

You only need to issue a 1099 if you pay a vendor $600 or more during a calendar, or $10 for royalties, interest, and dividends. This is based on when you sent payment, not when the vendor sent an invoice or when the services were performed. If a vendor sends an invoice in December 2016, but you paid it in January 2017, it would appear on the vendor’s 2017 1099. Similarly, if you prepare financial statements based on accrual accounting, if you accrue the expense in December 2016 and pay the invoice in January 2017, the payment would be reported on the 2017 1099.

In addition to the types of payments you’re making, look at the type of organization you are paying for services. Always get a W-9 from a vendor to see what type of legal entity it is. If a vendor is a nonprofit or a corporation, or an LLC taxed as a corporation, any payments you make are not 1099-reportable unless you are paying for legal services. If your organization files a Form 990 and you give out grants, you need the Social Security Number or EIN for every recipient for Schedule I. Grant payments are considered taxable income and are reported in box 7 of the 1099-MISC unless the recipient is a nonprofit or corporation.

Some vendors may have payments that are partially 1099-reportable, but not entirely. If a consultant bills you for work performed, as well as out-of-pocket expenses they incurred, pay attention to how they document the expenses. If they provide receipts and substantiation for the expenses, it is not 1099-reportable, if they follow the same guidelines you would use for an accountable reimbursement plan for your own employees. If they merely provide you a bill saying how much they spent out-of-pocket, the expense reimbursement is considered taxable income, and reported on the 1099 along with the payments for their consulting services. If the reimbursements are taxable income, but the consultant keeps receipts for the expenses throughout the year, he/she can deduct them as business expenses on his/her tax return, effectively reducing his/her taxable income as if the reimbursements had not been 1099-reportable.

You’ll have to send 3 copies of each 1099 – to the vendor who was paid, to the IRS, and to the state in which the vendor did the work. The deadline for sending the vendor’s copy is January 31. For 1099-MISCs reporting amounts in box 7, you must also file with the IRS by January. For other 1099s, you have until February 28 for paper filings, or March 31 for electronic filings. State deadlines vary, so check with any states you have to report in. If a deadline falls on a Saturday, Sunday, or legal holiday, it is extended until the next business day.