The 1099-MISC tax form goes out to independent contractors who do jobs for other businesses. If your corporation pays a restaurant for a party or a business dinner, the corporation may have to send the restaurant a 1099-MISC. If so, a second copy goes to the Internal Revenue Service, reporting the payment. Your corporation, however, doesn't have to send every contractor a 1099 -- only if certain conditions are met.

Business Structure

Whether you send the restaurant a 1099-MISC depends on the business structure. Corporations, except law firms, don't get 1099s, so if the restaurant is a corporation, you don't send one. If it's a partnership or a sole proprietorship, you mail them and the IRS the form. You also send the restaurant a 1099 if it's owned by someone's estate. You pay whether you take the office out to the restaurant or have the meal catered.


You don't send the restaurant a 1099-MISC unless you pay at least $600 for services rendered. That doesn't have to be a single $600 party: if the company caters four quarterly parties and bills you $150 for each, you still have to send the owner a 1099 form. Report the total you paid in box 7 of the form. You send them a single 1099 for the year rather than one each per service rendered.


If you arrange the party through a barter arrangement, you may still have to send out a 1099-MISC. For example, suppose your accounting firm does the restaurant's taxes in return for a big employee party. In that case, you have to write up a 1099 if your tax work for the restaurant owner is worth $600 or more. Use the normal fair market value of your work when figuring out the terms of the deal.


Unlike when you use a W-2 for your employees, you don't have to worry about tax withholding. Payments reported in box 7 are subject to self-employment tax, so it's entirely the contractor's responsibility to take out estimated taxes. If you pay a contractor any money that doesn't generate self-employment tax, you include that separately, in box 3 of the 1099-MISC. If the restaurant doesn't pay its taxes, it's not your problem; your only responsibility is to send out the form.