The Form 1099, referred to as an information return, is a series of forms provided by the Internal Revenue Service (IRS). There are several different types of 1099 forms; its purpose is to report the many types of income a person might receive during the year aside from the income he/she may receive from his/her employer. The party executing the payment is responsible for completing the 1099 form and sending it to the individual who was paid. The 1099 deadline for the upcoming tax year is 01/31/2019.
It is important to note that the IRS is focusing heavily on 1099 taxpayer compliance this year by enforcing penalties and increasing fines. Penalty rates can range from $50 to $530 per return depending on how late the correct Form 1099 is filed.
Generally, any person, including a corporation, partnership, individual, estate, and trust, who makes reportable payments, as defined below, during the calendar year must file information returns to report those transactions to the IRS. This includes furnishing a hard copy Form 1099 to the recipients of the income.
Filing penalties may apply if you:
(1) don’t file a correct information return by the due date and a reasonable cause is not shown;
(2) file on paper when you were required to file electronically;
(3) fail to report a taxpayer identification number (TIN);
(4) report an incorrect TIN; or
(5) fail to file paper forms that are machine readable.
Penalties for failure to furnish correct payee statements may apply if:
(1) you don’t provide a correct payee statement by the applicable date and a reasonable cause isn’t shown;
(2) all required information isn’t shown on the statement; or
(3) incorrect information is included in the statement.
If you have questions about 1099s, please contact us. We are happy to help.