When Do You Need to Issue a 1099 Form?
2020 is here, and tax deadlines loom. Many employers think that once W-2's are issued, they are off the hook, but your reporting obligations may need to go a bit further with any other outgoing payments documented with 1099 forms.
What is a Form 1099?
A Form 1099 - MISC becomes a catch-all form that covers all types of income. There are a few general rules you need to follow when filing a Form 1099, and as a customer, Basis 365 can help you track your payments and issue the appropriate forms - (which we are working on right now.)
Payment Types Covered
Typical payment covered by Form 1099-MISC include the following:
Services rendered
Royalties
Broker payments
Legal fees
It's important to note the purchase of tangible assets is typically not covered by Form 1099-MISC.
Form 1099 -MISC Requirements
Form 1099 - MISC is only required if the payment is above the minimum reporting threshold of $600. You aren't prohibited from filing if the minimum threshold isn't met, but the responsibility falls to the recipient to report the income on their tax return.
1099 Deadlines for 2019
The January 31 deadline applies only to Form 1099-MISC when there is an amount in box 7 - "nonemployee compensation." The filling dates for other Form 1099s are February 28, 2020, if by paper, and March 31, 2020, if filed electronically.
If you miss the filing deadline, you are subject to penalties. These penalties range from $50 - $550 per missed Form 1099, depending on how late the forms were submitted.
If you’re a current Basis 365 customer - we’re working on getting your Form 1099-MISC prepared and sent, and a member of our team may reach out to verify some information. If you’re not a current customer, reach out to our team of experts, learn whether our bookkeeping services for small and mid-sized businesses can help you with this and the rest of your accounting.
