Form 1099-MISC

The Internal Revenue Service requires that you file information returns, Forms 1099-MISC, for payments totaling $600 or more that are issued by your trade or business to individuals not treated as your employees as well as to unincorporated entities such as partnerships and LLCs.  This reporting applies to payments for services such as professional fees, contract labor, commissions, director fees, other non-employee compensation, and rents. With the exception of legal services, payments to corporations are exempt from these reporting requirements.  In addition, you may be required to issue Form 1099-DIV to report dividends or liquidating distributions or Form 1099-INT to report interest payments.

What’s New

There is a new filing date.  Beginning with reportable payments made in tax year 2016, the IRS requires Form 1099-MISC to be filed on or before January 31, 2017, when you are reporting nonemployee compensation payments in box 7.

Penalties

The following penalties generally apply to the person required to file information returns.  The penalties apply to paper filers as well as to electronic filers.  If you fail to file a correct information return by the due date and you cannot show reasonable cause, you may be subject to a penalty.  The penalty also applies if you file on paper when you were required to file electronically, you report an incorrect Taxpayer Identification Number or fail to report a TIN, or you fail to file paper forms that are machine readable.

The amount of the penalty is based on when you file the correct information return.  The penalty is as follows:

  • $50 per information return if you correctly file within 30 days
  • $100 per information return if you correctly file more than 30 days after the due date but before August 1
  • $260 per information return if you file after August 1 or you do not file required information returns.

Assistance with 1099 Form Preparation

We would be happy to prepare or assist you in the preparation of your Forms 1099.  To ensure accurate preparation, please forward the name, address, social security or federal identification number, amount and type of payment for each applicable payee.  If you wish us to compile the information, please provide a copy of your 2015 QuickBooks file and we will extract the necessary data.  The fee for compiling the information and/or preparation of the Forms 1099 will be based upon our standard hourly rates.

To comply with the IRS deadlines, please provide the information to our office by January 15, 2017.

Please let us know if you have any questions by contacting either Kami Hitner or Maria Prassinos at taxadmin@untracht.com

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