1099 Due Date is Approaching Fast

1099 Due Date is Approaching Fast



Now is the time to determine if you made any payments during the 2018 tax year that would require you to file Form 1099. If you paid $600 or more in compensation to a non-employee or an unincorporated business, you are most likely required to report the amount on a Form 1099. Generally, any person, including a corporation, partnership, individual estate, and trust which makes reportable transactions must file a Form 1099. The type of reportable transaction determines the specific Form 1099 which must be filed. One of the most common forms issued is Form 1099-MISC. Form 1099-MISC is required for each person to whom you have paid any of the following during the year:

  • at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;
  • at least $600 in rents, services performed by someone who is not your employee, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
  • any fishing boat proceeds,
  • Gross proceeds of $600 or more paid to an attorney during the year.

If you are filing Form 1099-Misc and reporting amounts in Box 7: Non-employee Compensation, the IRS filing deadline is on or before January 31. If you are not reporting amounts in Box 7, then the deadline is February 28 for paper filings or March 31 for electronic filings. However, regardless of which boxes you are reporting, Form 1099 is due to the recipient by January 31st.

Failure to file these forms by the required deadline is considered a violation of IRS regulations and is subject to penalties. The Trade Preferences Extension Act of 2015 increased the penalties for failure to file correct information returns to $270 per failure, up to $1 million per calendar year for small businesses. The penalties are doubled to $540 for intentional disregard. If the failure is corrected within 30 days of the required filing date, the penalty is $50 per failure up to $191,000. If the failure is corrected after 30 days but before August 1st, the penalty is $100 per failure up to $547,000.

If you are a business owner, you should have an ongoing procedure for requesting a W-9 from any vendor you expect to pay more than $600 during a calendar year. The filing of these forms should be taken seriously.

With only a few weeks to go until the deadline to file, please do not hesitate to contact our office if you need assistance with your filings.

About Author


MKS&H is committed to providing personalized tax and accounting services while developing a deep understanding of you, your culture, and your business goals. Our full view of financial systems and the people behind them allow us create and evolve the best solution that will help you and your business thrive. The accounting experts and consulting professionals at MKS&H work together to help you achieve the financial results you want.

Related posts

LLC vs. S Corp for Tax Purposes

When it comes to structuring your business, the choice between forming a Limited Liability Company (LLC) or an S Corporation (S Corp) can significantly impact your tax liabilities. Both entities offer distinct advantages and disadvantages, making it crucial to understand the tax implications before making a decision. The Basics:...

Read More

The Tax Impact of Depreciation

When it comes to running a successful business, understanding the nuances of taxation is crucial. One often overlooked aspect with a significant impact on taxes is depreciation. Depreciation is not just an accounting concept; it can have tangible effects on your tax liability. Let’s explore the tax implications of...

Read More