1099’s

In recent years, the government has been implementing new procedures to identify companies that are not filing Form 1099. This is now a question on business tax returns  to identify companies that are required to file Form 1099. The Form 1099 requirements have not changed from prior years, but the penalties have.

As a reminder, businesses are required to issue a Form 1099 for any payments of $600 or more for services by vendors that are not incorporated. If the vendor name does not include Inc. or Corporation, then it is necessary to verify the entity status by requesting a Form W-9 from that business or individual. For the most part, LLCs should receive 1099s.

File Form 1099-MISC for each non-incorporated vendor to whom you have paid at least $600 during the year for:  (This is not all inclusive, just the most used for my clients.)

• Rent (real property, vehicles, equipment, livestock, etc)
• Prizes and awards
• Other income payments
• Crop insurance proceeds
• Gross proceeds of $600 or more paid to an attorney (including incorporated attorneys)
• Services (Bookkeeping; mechanics; plumbers; janitorial; contractors; builders; (including parts and materials) just to name some examples.)
• Contract Labor

1099-INT is required if you pay at least $600 in interest in the course of your trade or business. 

The penalty for not filing the required Form 1099s with the IRS has increased to a maximum of $250 per 1099, with an additional maximum of $250 per 1099 not provided to payees, for a total of $500 per non-filed 1099.

The due date these need to be sent to recipients is January 31^st and submission to IRS by January 31^st.  Late filing penalty ranges from $30 to $100 depending on when you file the form. 

If you wish to prepare your own forms, we have them available here at the office at no charge.  If you want our office to prepare the forms please have the information submitted as soon as possible in January. 

1099 Pricing Structure