Seven Tips for Sending Out 1099

With February 1, 2016 approaching, it is time for 1099 filing.

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Just in case you are just getting over the realization that 2016 is here, you need to take note that the countdown to the deadline for your form 1099 filing, is on with the New Year already heralded.

Independent contractors that you paid during the year fall into the class that requires the filing of form 1099 and this does not apply to every payment made.

There is a need for attention to details and avoidance of possible mistakes as you fill the form 1099. There is a penalty of $30 to $100 for every form that you fail to send out before February 1st  ends, with the penalty increasing with each passing day. A deliberate refusal to adhere to this requirement makes a business liable to a penalty of $250 at the minimum with the possibility of incremental payments.

A requirement is also in place for the filing of form W-9 for anyone that receives over $600 during a given year. You need to cross check so that you can track the EIN and mailing address for anyone whose form is unfiled. The current W-9 is available on the IRS website.

The process of this filing is made easier when you track all payments throughout the year by name and dates. In case you have failed to keep a track, you are required to have the information assembled and remember to start out with this in the New Year. A simple MS Excel record can be created for payments as you make them or in the alternative, use QuickBooks software.

Tips to Help You Determine Who Needs a Form 1099:

  1. Look through your payment history for anyone who received more than $600 in 2015 and mail a 1099-MISC across. Payments in respect of prizes, bonuses, materials, awards, rents, services or other payments made as income fall into this category.
  2. Payments made to a Corporation are excluded to receive form 1099. The best way to find out is to check with the vendor.
  3. Lawyers are required to be issued form 1099. Whether the law firm is incorporated or not, the government requires that they file a form 1099.
  4. 1099-INT is issued to the person who receive the interest for any loans. that is more than $10 with the exclusion of lines of credit and mortgages.
  5. Rent received on behalf of property owners or landlords also fall within the bracket if you are a property manager immaterial if you are managing residential, commercial or vacation rental properties.
  6. For users of QuickBooks, identifying vendors to issue 1099s is easy and if you find any difficulty, you can get help from Fast Trac Consulting. Your questions can be answered and administering form 1099 to your vendors can be handled as well.
  7. For persons who love DIYs, 1099s are not just about a download from the applicable IRS webpage. You need to purchase the forms, envelopes to go with them or just efile the 1099’s. Or just order it online at IRS.gov to be mailed to your address. Note that the forms are in triplicate and pre-printed, so complete make sure your 1099s are compiled along with a 1096 and submitted to the IRS.

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Forms to file:

Form 1099-MISC – A separate 1099-MISC is prepared for each independent contractor that was paid over $600 in a given year. There a five carbon copy forms for each 1099-MISC that you prepare for each contractor. They are as follows:

  • Copy A – You will send this copy to the IRS along with Form 1096
  • Copy B – Copy for recipient (independent contractor) to keep for their records.
  • Copy C – Copy for you to keep as the payor.
  • Copy 1 – State Tax Department Copy
  • Copy 2 – For recipient to file with State Tax Return.

Form 1096 – In addition to filing the individual 1099-MISC Forms (Copy A) with the IRS you are required to submit Form 1096 “Annual Summary and Transmittal of U.S. Information Returns”. Form 1096 Includes your business name, address, phone number, email address, employee ID, the # of 1099 forms being filed, and total amount of payments being recorded on all of your 1099-Misc.

Help me file 1099 forms!

You Do It For Me business, give me a call at 215-579-1465 or send me a quick note with all details and I will be in touch as soon as I can.

Due Dates to file the tax forms:

February 1, 2016 – Form 1099-Misc are required to be mailed to independent contractor by January 31 of the following year.

February 29, 2016 – Form 1096 and 1099 must be filed with IRS by February 28th of the following year.

March 15, 2016 – Filing 1099 electronically with the IRS.

August 1, 2016 – File Corrections for Forms 1099 with IRS via paper or electronically.

Help me file 1099 forms!

You Do It For Me business, give me a call at 215-579-1465 or send me a quick note with all details and I will be in touch as soon as I can.

By |2017-03-17T11:35:56-05:00December 30th, 2015|0 Comments

About the Author:

With more than thirty years of experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. As the CEO and owner of Fast Trac Consulting, Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge and experience with others, she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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