Payments to lawyers are confusing. With 2 different 1099's it has actually cleared it up slightly:
- 1099-NEC - ALL payments to attorneys for fee services are reported in Box 1. Regardless of their corporate status. Only exception would be if they were paid by credit card, in which case they will receive a 1099-K from the CC company.
- 1099-MISC - Attorney payments that are part of a settlement or lump sum are reported in Box 10. NOT their 'hourly' fee services.
And if you "over-report" on a 1099, it is always easy to fix with a corrected 1099, and often just a promise not to do it again. Sending one to an attorney is NOT dangerous, except for the attorney who will have to report the income and pay taxes!
