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9 Reminders about Form 1099

Due by January 31, 2013 are Forms 1099 for all independent contractors and companies to whom you paid $600 or more for services in 2012. Because there are always questions about issuing Form 1099, I wanted to provide you information that may be helpful.

 

  1. Corporations do not require Form 1099. However, if you are unsure of the corporate status of a company, it is best to go ahead and send a 1099.
  2. Attorneys need a Form 1099-MISC from you regardless of entity status. So, ALL attorneys to whom you paid $600 or more in 2012 require a Form 1099-MISC.
  3. Royalty payments in excess of $10 require a Form 1099-MISC.
  4. Remember to include rental payments for office space, machine rentals and pasture rentals in your list of 1099s. Storage units do not count as rental property.
  5. Cash or prizes valued at $600 or more and awarded to individuals (not employees) require a Form 1099 if there was no wager involved. Include the amount of federal withholding tax, if applicable. If a wager was involved, issue Form W-2G instead.
  6. Make sure that you have a Form W-9 on file prior to issuing the Form 1099. This form is your record of all the information you need to complete a 1099 – legal name, address and taxpayer identification number. If you suspect a change of address since receiving the W-9, then correct the information for your records.
  7. There are no extensions available for sending Form 1099 to the required parties. In fact, you’ll have to pay a $30 penalty within 30 days late, $60 for after 30 days and prior to August 1, $100 penalty for filing on or after August 1, and $250 for intentionally not filing a Form 1099.
  8. You need to file a copy of the Form 1099-MISC to the IRS by February 28, and you may request a 30-day extension for the IRS copies by using Form 8809. If filing electronically, the deadline is March 31.
  9. Remember to file Form 1096, which is a summary of the 1099s that you issued.

 

The above reminders can be complex; referring to the IRS instructions will provide additional clarity. Happy New Year!

 

 

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