Some of the more common 1099's are;
1) 1099-C - Cancelation of Debt (Credit Card or Primary Residence Foreclosure)
2) 1099-A - Abandonment of Property (Lender reported acquisition or abandonment of property)
3) 1099-G - Unemployment
4) 1099-R - Distributions and Contributions
5) 1099-MISC - Non Employee Compensation (Awards, Bonuses, Attorney Fees, etc.)
The most commonly used 1099 reporting is the 1099-MISC. If you are operating a business involving multiple vendors, sub contractors and other businesses with the intent to make a profit, if the expense is pertinent to normal trade or business practices that exceeds $600.00 of payment for services rendered or more.
Deadlines for issuance of 1099 is as follows;
January 31 - The issuing entity, a calender year IRS Taxpayer, requirement to send off a 1099. The consequence of Failure to File an information return after 1/31 but less than 30 days late is $30.00 per form with $75,000.00 cap for small businesses and a $250,000.00 cap for larger businesses.
Should information returns be issued beyond 30 days late but issued prior to August 1 the Failure to File penalty is $60.00 per form with a $200,000.00 cap for smaller busineses and a $500,000.00 cap for large businesses.
If the information return is issued after August 1 the fines are even steeper...$100.00 per form, $500,00.00 for small business owners and a $1,500,00.00 penalty for large businesses. Yikes!
Deadline for IRS reporting of 1099 expeses is as follows;
February 28 - The issuing entity needs to report the income amount to the IRS
The aforemention penalties apply to both paper and efiled IRS Taxpayers or business entities. Generally, payments to Corporations are not reportable, however there are additional provisions for corporate reporting for items such as medical and health care payments, Acquisitions or Abandonment and Barter excahnges.
DWK Tax Group is the nationwide leader in Tangible and Sustainable IRS tax solutions tailored for potential clients addressing the client complexities, overcoming multiple obstecles that may surface. It makes no difference as to whether the Federal or State government is involved, DWK Tax will engage any all IRS and State taxing authorities swiftly and acquire the most equitable position allowed by Federal and State Law.
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