Forms 1099 due January 31 – deadline quickly approaching!

By Dustin Wielenga, CPA

Many companies, as well as individuals with business activities, are required to file Forms 1099. This includes self-employed individuals, or individuals with rental properties. The filing deadline is as early as January 31 of each year, so it is important to act quickly.

What is Form 1099?

There are a couple of different Forms 1099. They are used to report payments made by a business to another taxpayer. The most common are Form 1099-INT (reporting interest), Form 1099-DIV (reporting dividends), and Form 1099-MISC (reporting other items including non-employee compensation and rents). Refer to the 1099 instructions “General Instructions for Certain Information Returns” for a more detailed listing of what is reportable. The forms are to be completed on a calendar year basis.

Below is a list of some of the most common types of payments reported on Form 1099-MISC. The list is not all-inclusive, but should give you an idea of what is required.

  • Compensation for services to non-employees exceeding $600
  • Attorney fees exceeding $600
  • Certain rents exceeding $600
  • Prizes and awards exceeding $600
  • Royalties exceeding $10

When are the deadlines?

A copy of the Form 1099 must generally be provided to the payment recipient by January 31, 2018. The deadline for filing with the IRS varies by specific situation, but targeting January 31 is a best-practice.

Penalties

The late filing penalty generally ranges from $50 to $260 per form. If a taxpayer has many forms required to be filed, then the total penalty can be hefty. Additionally, taxpayers need to certify on their tax return whether they complied with the 1099 filing requirements. These tax returns are to be signed under penalty of perjury, so it is important for taxpayers to comply.

What should I do?

In order to complete any required Forms 1099, you will need to obtain a Form W-9 from the payment recipient. You will want to track down this information as soon as possible so that you can timely file any Forms 1099.

Many taxpayers take care of filing their own Forms 1099. If you have any questions about whether you should be filing any Forms 1099, or if you would like us to assist you with the filings, please contact us as soon as possible. The deadlines are rapidly approaching.

The material appearing in this communication is for informational purposes only and should not be construed as legal, accounting, or tax advice or opinion provided by Lodder CPA PLLC. This information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials have been prepared by a professional, the user should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information.