Is it mandatory to report what was paid to contractors?

At the end of the year, a US-based employer must report to tax authorities (the IRS, or Internal Revenue Service) the amount that was paid to independent contractors. Reporting is needed if:

• You made the payment to someone who is not your employee;
• You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
• You made the payment to an individual, partnership, LLCs unless taxed as S or C Corporations, estate, or in some cases, a corporation; and
• You made payments to the payee of at least $600 during the year.

See also:

• What is Form 1099-NEC and who is responsible for completing this form?