The 1099 Tax Form and Why You Should File it on Time
Now, more than ever before, the IRS is buckling down…
on those people and businesses that are failing to file or issue their 1099 tax form.
A form that is filed late will only cost you around $50 per form.
A form that is not filed or issued could cost you up to half of the amount you were required to pay, plus interest.
Yikes!
That is a cost that you do not want to pay.
The law currently requires the following business entities to issue the 1099 form by the last day in January, to whom more than $600 for services was paid during the calendar year.
- C Corporation
- S Corporation
- Partnership
- LLC not filing as a corporation
- Sole Proprietor
- Rental Property
Some common examples of payments include contract or outside labor, management fees, trustee fees, cleaning or janitorial services, professional fees, repairs and maintenance.
These tips should be followed when you review your current years activity.
- Review all of the vendors to whom you made payments during the year
- Verify that you have a current mailing address and Tax ID Number [Social Security Number or Employer ID Number]
- Use a W-9 form to obtain their EIN if you do not have it on file (You should only call if they do not return the form)
- Please note that you should always have every vendor complete a W-9 before making any payment
- Current law also requires backup withholding of 28% for all reportable payments when payee does not furnish you with a Tax ID Number
- Note that if you have multiple rental properties you must report the total amount paid
Make sure that your business is taking care of it’s 1099 forms or it could end up costing you.
If you have any questions about tax planning, your 1099 tax form or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688.
– Mark
This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.
LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.
