It is the end of the year again, and our thoughts turn to year end reporting using Form 1099! There are changes in reporting 1099 information for 2015. These are the forms you will be filing in early 2016. The changes include increased penalties. Be sure you send out W-9 forms, or a substitute for the W-9, to gather the important taxpayer information from your payees if you don’t already have that information.
The is a $600 aggregated threshold for any payee before reporting is required. But remember, you are not prevented from reporting smaller amounts.
Payees that are exempt from reporting include government entities, and not-for-profit entities. Also, you do not need to report amounts paid to Corporations, either “C” or “Sub S” unless the corporation is medical or legal.
A few examples of payments that are not reportable on a Form 1099 include goods purchases, refunds and rebates, storage, freight, and employee expense reimbursements that meet accountable plan rules.
The due dates for filing Forms 1099 with the IRS is February 29, 2016 for paper filing and March 30, 2016 for electronic filing. Statements to payees must be postmarked by January 31st. We recommend that you send the 1099’s to your vendors on paper as early as possible, and report to the IRS as late as possible. This strategy gives you the best chance to catch errors before the data is submitted to the IRS. This will minimize the potential for the IRS levying penalties against you.
And don’t forget; if you do not have the vendor’s Taxpayer Identification Number using a Form W-9 when you make a payment to that vendor, you must make a backup withholding. The IRS provides Form W-9 to obtain vendors’ information. Here is the link: https://www.irs.gov/pub/irs-pdf/fw9.pdf
Feel free to contact me if you have any questions!