Implement This Great Company Policy for Collecting Data from Contract Laborers
Implement a new policy for data collection to take the stress out of your January 1099 filings and avoid non-compliance penalties! We recommend that you have all Independent Contractors fill out a Form W-9 throughout the year BEFORE you pay them to ensure that you receive the information required to file Forms 1099/1096 at year end. (For your convenience, see the following link to access the needed form: Form W-9) Due to the increased oversight and new penalties that will be assessed going forward, this course of action will help you avoid the frustrating predicament of not being able to obtain the needed information to file the required forms on time.
New 1099 Filing Deadline
The deadlines pertaining to Form 1099/1096 filings have changed this year! All parties, the recipients AND THE IRS, must receive your finalized 1099 forms by JANUARY 31ST for filings to be considered timely. The new January 31st filing deadline also applies to Forms W-2/W-3.
Filing Requirements & Penalties
Forms 1099 must be issued by your trade or business to individuals or partnerships to whom you paid $600.00 or more for SERVICES, RENT, INTEREST and/or DIVIDENDS. If a person is incorporated, no return need be filed on that person except if you have made medical and health care payments. Any dollar amounts paid to attorneys must be reported as well. Please take note that the IRS has put new non-compliance penalties in place of up to $1,060 per 1099 (versus $50 prior).
Contact Jane Smiley CPA, Inc. if you would like to learn more about how we help our clients manage their business and keep up with tax compliance requirements.