Do you need to send out 1099s
Happy New Years!
Wait! What are these forms again?
The most common type of 1099 is the 1099-MISC. This form needs to be completed for anyone who has provided services to you amounting to $600 or more.
These services can be for anything from accounting services to snow but of course there are exceptions!
A 1099-MISC isn’t required if:
· The company providing the services is incorporated – except with lawyers.
· The person who provided services is your employee and will receive a W2.
· The amount of services provided is less than $600 worth.
· *Forms 1099 do not need to be issued for purchases of inventory or other products.
So, when are they due?
Depending on the type of form you are filing, the due dates may vary. The IRS website gives a great picture of when each form is due.
That information do I need to gather?
· Full name
· Tax entity type
· Tax ID number for the vendor
· *If the vendor is an LLC, the business needs to know if the LLC is taxed as a single-member LLC, a partnership, or an S-corporation.
· Amount paid to vendor
Anything else I should know before I get to work filling these out?
As always, these forms are more complex than meets the eye, and this list of items to include is not all-inclusive.
Forms W-2 and 1099-MISC are among those known as “informational forms,” meaning information, rather than taxes, are being remitted with the filings. Late or no filing, though, can be costly due to penalties, and the IRS has indicated repeatedly that they plan to increase scrutiny in this area
If your head is still spinning, let us know. We’re always here to help!
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
IRS CIRCULAR 230 DISCLOSURE:
Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter