Until now, employers had two dates to keep in mind when preparing 1099’s and W-2s. Beginning with 2016 forms, employers will now have one filing deadline for all Federal information returns – January 31, 2017. This applies for both employee and agency copies, or whether filing paper or electronic returns. The state of Georgia has also adopted the new January 31 filing deadline.
Who needs to be issued a 1099-MISC?
Generally, you should include all vendors to whom you’ve paid $600.00 or more during the year that are not incorporated. Your list likely includes individuals, partnerships, and some corporate entities, including:
- Rental payments for office space, equipment, or machinery
- Royalties paid in the amount of $10 or more
Exception: Attorneys should be issued 1099’s, regardless of whether the attorney/firm is incorporated or not incorporated.
Penalties for missing the 1099 deadlines have increased substantially for erroneous or unfiled information returns including 1099-MISC can mean thousands of dollars in penalties if not filed in a timely manner.
Not Required to File Form 1099-MISC
You are not required to file Forms 1099-MISC if any of the following situations apply:
- You are not engaged in a trade of business
- You are engaged in a trade or business and
- The payment was made to another business that is incorporated, but was not for medical or legal services or
- The sum of all payments made to the person or unincorporated business is less than $600 in one tax year
- The payment was made using a credit card (this information is to be reported by the financial institution)
Planning Point** The smartest way to make sure you have all the information you need to submit your 1099 is to have outside vendors or contractors fill out Form W-9 before ever starting work.
We know that filing can be complex and confusing. With penalties increasing at an astounding rate, make sure you have a reliable accounting partner who can help you file with absolute accuracy.
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