Most farmers are used to preparing form 1099s in January of each year for any unincorporated businesses that provide services to them during the year. Once those total payments exceed $600, the farmer is required to issue a form 1099-MISC. If the business providing the services is incorporated, then a form 1099 is normally not required.
However, for many years, Congress has required a form 1099 be issued to any medical provider that provides services exceeding $600 in a calendar year and these rules require a form 1099 for any entity. Therefore, if the medical provider is incorporated, the business would still need to issue a form 1099.
The IRS released guidance late last year indicating that veterinarians meet the definition of a medical provider, therefore, if the farmer pays more than $600 to any vet during the year, they should issue a form 1099 at the end of the year, even if the vet is incorporated. If you have a vet that provides services during the year and these payments exceed $600 for the year, make sure to issue a form 1099 to them at year-end. Instead of being listed in box 7 (non-employee compensation), these payments will be listed in box 6 (medical and health care payments).
Tomorrow starts the three-day AICPA Ag Conference in Austin, Texas. I am looking forward to the line-up of speakers that we have this year and will fill you in on anything worthwhile that may happen.