It is that time of year again, Form 1099s are being worked on, many may have already been sent. So, if you are a new business owner, or one who hasn’t been “as good about this as I should be”, here are some guidelines for sending out your 1099s. Please note, in this blog piece we are going to discuss Form 1099-MISC only, there are also 1099-INT, 1099-C, 1099-S and 1099-K. For more information on these forms please visit www.irs.gov.
The easiest way to complete this task is to delegate it to your bookkeeper, either the one you have on staff or your outsourced bookkeeping service. Professional, well informed bookkeepers will have the knowledge and resources to send out your 1099s to every vendor who is eligible to receive one, while you continue to run your business.
If you don’t have a bookkeeper, then it gets a little more complicated, but not much. So let’s go over who should receive a 1099, what information you need to have from both the vendor and your records, and the various ways to remit these forms by the deadline.
Who should receive a 1099? Anyone you have paid at least $600.00 to during the tax year. The most common recipients fall into 3 categories:
- Independent contractors, freelancers & service providers who are not your employees. Depending on your industry these could be subcontractors who assisted you with a construction project and/or professionals such as bookkeepers, business coaches, & consultants.
- Rent, for your office space, machine rentals, etc.
- Any other income such as prizes and awards if they met or exceeded $600 to an individual.
What information do I need? You will need the full legal name of your vendor, their address and Tax Id number, either their Social Security Number or their Employer Identification Number. These can be obtained by requesting a Form W-9 from your vendor, which can be obtained from the IRS or for convenience can be downloaded from our website at www.fournierabservices.com on the Resources page. The last piece of information is how much you paid the vendor in the tax year.
How do I remit these forms? There are a couple of ways to send these forms to the recipients and the IRS.
- First, you can send physical paper forms to both. These can be purchased at your local office supply store or through online retailers such as Amazon (though with shipping this may not be the best option this year). If you are using QuickBooks, you can process & print your 1099s through the Vendor Center as long as your version hasn’t been sunset. If you are filing by mail, you will need to submit a 1096 Form as well to the IRS.
- Second there are a number of excellent websites that will allow you to electronically submit your 1099s to the IRS. These also allow you the option of electronically sending them to your vendors or printing and mailing them yourself without needing special forms. Please note that there is a charge for each 1099 submitted, but on the sites I am familiar with, these are not outrageous charges. Google “submit 1099s electronically” and you will receive pages of options.
What is the deadline for sending 1099s? The general rule is that 1099s need to be sent to your vendors by January 31st for the previous year (1/31/16 for calendar year 2015). However, depending on when January 31st falls, there may be a day or two leeway. Because January 31, 2016 falls on a Sunday, Copy B of the 1099-MISC form must be postmarked by February 1st. The IRS copies (the red forms) and Form 1096 are generally due on February 28th. Again, depending on when that day falls or if it is a leap year, there may be a different due date. For example, 2016 is a leap year, so the IRS copies and Form 1096 need to be postmarked by February 29, 2016.
If you find you have questions or need assistance with your Form 1099-MISC, Fournier Accounting & Bookkeeping Services is happy to assist you in any way we can. You can contact us through www.fournierabservices.com, and click the Contact Us button.
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This article is meant to be a guideline only, for complete rules & regulations regarding Form 1099-MISC, please review 2016 Instructions for Form 1099-MISC which can be downloaded from www.irs.gov.