Each year, the IRS requires businesses to file Form 1099 on various vendor payments made during the year, to verify the business expense for tax purposes. If you made certain qualifying vendor payments during the calendar year as a business or self-employed taxpayers, you may be required to file an information return Form 1099 with the IRS.
We are happy to provide you with assistance with your tax services, or filings of your Form 1099s.
You should approach 1099 filing compliance seriously. In fact, two questions are asked on every tax return for every business regarding the 1099 filings. 1) Are 1099 filings required? [see following subject payments] 2) Did you file the 1099s? Your response is required for an accurate tax filing each year. Penalties for non-filing are expensive. The filing deadline for 1099-MISC is January 31.
In preparation for preparing 1099s, here are the filing requirements for businesses and self-employed taxpayers:
Payments subject to 1099 Filing:
If you made any of the following types of payments, then you may be required to file an informational 1099 return.
- Form 1099-MISC is required for each person to whom you have paid during the year:
- at least $10 in royalties
- at least $600 in rents, services, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds; or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
- gross proceeds of $600 or more paid to an attorney during the year.
- Interest on a business debt paid; filed on Form 1099-INT for interest payments of $10 or more.
- Dividends or other distributions to a company shareholder; filed on Form 1099-DIV for dividend payments of $10 or more.
You are not required to file information return(s) if any of the following situations apply:
- You are not engaged in a trade or business.
- You are engaged in a trade or business and
- the payment was made to another business that is incorporated, or
- the sum of all payments made to the person or unincorporated business is less than $600 in one tax year.
- Wages paid on Form W-2
- Employee expense reimbursements
Thank you for complying with IRS required 1099 filings.
To simplify the preparation of your Form 1099 filings or associated tax questions, please contact our office and speak with Anthony Martin: 717-701-5368, extension 1.
Happy New Year!