Let’s just cut to the chase. Nobody finds joy in this part of the year. Both sending out 1099’s and receiving them can be a nuisance, but we have to do it. Let’s “un-complicate” these things and calm ourselves.
Who Gets One?
Any person(s) who you have paid at least $600 to. This is generally a 1099-MISC and is used when you have made payments to someone who has done service for your business. Individual, LLC, Partnership, and Estate are to name some.
Are There Exceptions?
Sure there are exceptions, but be very careful and be sure to check the IRS website. Some exceptions include Corporations, Real Estate Agents and Rental Managers. Also there is no need to send a 1099 to storage facilities or sales people. One tricky one is Lawyers. You are required to send them a 1099 if you paid them over $600…even if they are incorporated.
Yup, there sure are penalties if you don’t send them out. And they can rack up quickly. The penalties range from $30 to $100 bucks…per person or form! Time plays a role in this fee as well. It all depends on how late it is too! Remember the fines can keep going up. There is no max.
When Is The Deadline?
I know, I know, we are almost done here. But this is important information, so keep reading! You MUST mail out all Form 1099s by January 31. Hold up, there is more. Next you MUST mail in a transmittal Form 1096 TO the IRS before the date of February 28th. To make life much easier on you, checkIssuing.com offers 1099 services. Take a load off and let us handle it for ya!
What Do I Do?
Unfortunately you can no longer just download 1099’s from www.irs.gov. The IRS actually pre-prints in triplicate. So, you have to do some fancy foot work and be on top of this early on. Start by ordering the forms through the IRS. Sometimes you can get them at the post office, and if need be an actual IRS service center. Sounds like a lot of work, and it is. But definitely worth being on top of so you don’t have to deal with any hiccups in the future.