File your 1099 Forms or Face a Stiff Penalty

Last week I talked about the new 1099-K for third party networks.  This week I want to mention that there is a new line on the Schedule C, Form 1065 and Form 1120S for the total amount of all 1099-K’s received to be reported.  There is also a new line on those forms to answer the question “Did you make any payments in 2011 that would require you to file 1099 Forms?”  And if you answer yes there is another question to answer if you filed them.  So not only do you have to answer if you made any payments for services  that would require a 1099 Form but you have to answer whether you filed them or not.  That’s because the IRS doesn’t want you to have the excuse that you didn’t know you had to file them when they hit you with a penalty for not filing them!  The penalty is $100 for each 1099 Form you failed to file!   The deadline to send the 1099 Forms to the vendor is January 31, 2012 and most of you won’t see the IRS reminder on your tax return until you file it which isn’t until March 15 or April 15th depending on your entity type.  So here is your reminder to review your Vendor list now and determine if you need to send 1099 Forms.