I thought it might be handy to provide a few reminders about filing those pesky 1099 Miscellaneous Forms. There are numerous 1099 forms that can be issued at year end. We are only addressing the most common form, which is form 1099-MISC, as well as the most common payments reported, which are rents and subcontractors payments. According to our resources, 1099 audits are on the rise so please make sure you file these important forms! The deadline for delivery to recipients of Form 1099-MISC is January 31, 2013. The deadline for Form 1096 and Copy A of the 1099-MISC is February 28, 2013.
- All vendors, except corporations, paid $600 or more for services and/or rent should be issued a 1099-MISC.
- Attorneys should be issued a 1099-MISC for any and all payments made to them, regardless of the dollar amount.
- It simplifies the year-end process if you submit a Form W-9 to all vendors during the year to receive confirmation of their federal ID number and the type of entity before issuing them payment. If you do not have a Form W-9 from these vendors the IRS could consider you an employer of this vendor which would make you liable for taxes to be withheld and remitted at 28%. Find Form W-9 at www.irs.gov/pub/irs-pdf/fw9.pdf
- This is the first year that 1099’s will be issued from merchants. This means that all the services you paid for with a debit or credit card will be reported by the merchant and you are only responsible for the payments made via check. Please make sure your software is not accounting for debit and credit card transactions when it creates the 1099 Miscellaneous forms, otherwise your vendors will have to claim twice as much income as they actually earned from you. I’m pretty sure they will scream at you which means you will then have to file corrected 1099s so make sure you get it right the first time.