If you’ve been reading our blog, you know that having your 1099 forms properly submitted and accounted for is a critical part of ensuring accurate tax filings, both for businesses and taxpayers. This year, the IRS has made a significant change to the rules for filing Form 1099. The change relate to the 1099-MISC, which is issued to independent contractors and recipients of non-employee compensation.
Take Note of New 1099 Deadlines!
In previous years, the payee copy was due on January 31, but the matching reports to the IRS were not required for another 1-2 months. Paper copies are due February 28, and electronic filings are due March 31. Starting this year, there are no staggered deadlines. The new rules now stipulate that ALL FILINGS ARE DUE ON JANUARY 31. (Sorry for the yelling, but this is important.)
The IRS made this change in an attempt to make it easier to detect and prevent refund fraud. However, this may make it difficult to correct any inadvertent errors. Previously, if a mistake was found on a Form 1099, there would be plenty of time to correct and reissue a new form before submitting the matching information to the IRS.
Accurate Info Can Help You Avoid Audits
Remember, all Form 1099s are tied to a unique taxpayer identification number (TIN). For individuals, it’s typically their social security number (SSN). Tax returns with missing or inaccurate claim numbers are almost guaranteed to be audited. We work diligently to help our clients obtain accurate information for all service providers, so you can avoid incurring penalties for incorrect or late filings. On your end, please make sure you have accurate and current W-9 Forms on hand for all recipients of paid compensation.
1099s for Individuals
And it’s not just businesses that need to take note! If an individual pays another individual for household services, they may be required to issue their own 1099 or W-2 forms. (This includes services like like lawn and garden maintenance, child or elder care, or house cleaning.) It can get confusing, as there are many rules and stipulations. The last thing any tax filer wants to incur is a mistake with the IRS, so call us now! It’s always better to file correctly first, then to try and make corrections later on.
Call on us for Help
The deadlines for this year are fast approaching. Ten Key Accounting & Bookkeeping is ready to make sure all your tax forms are issued correctly and on time. We can answer your questions on 1099s, assist with filing, and ensure individuals and businesses act in compliance.