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Get Ready for 1099 Filing

31 Dec Posted by in Newsletters | Comments
Get Ready for 1099 Filing

Every trade or business must file information returns (Forms 1099) for each year that certain payments are made to noncorporate recipients.

One of the most common information returns for most small businesses is Form 1099-MISC. You use Form 1099-MISC to report miscellaneous payments to nonemployees. This includes fees for services provided to your business by independent contractors, such as consultants, cleaning people, and others. Generally, you don’t report fees paid to corporations, but there are exceptions. Payments to lawyers, for example, must be reported whether the lawyers are incorporated or not.

This month is the perfect time to start assembling what your company will need to meet the reporting requirements for Form 1099 filing – a list of recipients, verification as to corporate/noncorporate status, and the recipient’s taxpayer information. Getting a head start now will eliminate a last-minute scramble next month.

Failure to file returns or to include correct information can result in a fine of up to $100 per information return to a maximum of $500,000 for a small business.

Information returns are to be given to payees by February 2, 2015, and copies are to be mailed to the IRS by March 2, 2015. The IRS due date is extended to March 31, 2015, for electronically filed returns.

If you need help determining your 1099 filing requirements for this year, contact our office right away.

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