If you’ve got your own accountant or payroll service, then you can pay them to generate the proper forms and send out these 1099s. You must also file a Form 1096 and submit the information to the IRS by March 31st. The 1099-MISC forms must typically be sent out to independent contractors by January 31st following the end of the tax year in which you made the payments. Note that last sentence: The penalty for failure to file Form 1099 can be as much as 50% of the amount paid for services. The penalty for failure to file Form 1099 can be as much as 50% of the amount paid for services. The most effective way to obtain the information needed to prepare the Form 1099 is by requiring that an IRS Form W-9 be completed prior to any payment being made. This is required whether these payments are spread out over the course of the year or are paid in one lump sum payment. The Internal Revenue Service (IRS) requires businesses (including not-for-profit organizations) to issue a Form 1099 to any individual or unincorporated business paid in excess of $600 per calendar year for services rendered. Here are the specific rules as laid out in the official IRS Form 1099-MISC Instructions : Did you as a small business pay another person or unincorporated business more than $600 total in the last year? You may have to provide them a 1099-MISC form.
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