Almost all businesses will only have to worry about the most common 1099, the 1099-MISC. This form will be used for the most part to pay for labor and services by small businesses, independent contractors, doctors or health clinics.
Corporations are for the most part exempt from this, except for legal and medical corporations. You also must file a 1099 form for any monies paid to an attorney or crew members of a fishing vessel.
Payouts of substitute dividends, royalties or tax-exempt interest will also demand a 1099, as well as the sale of products for resale worth $5000 or more to a retailer who does not have a permanent establishment.
The forms must be filed by February 28th in 2013. This date usually falls in the last week of February if you are filing by paper, and 30 days later if filing electronically. The electronic filing date for 2013 falls on April 1, 2013.
You will need the Social Security Number or the TIN of the business with whom you are filling to form out to. Many small business owners use their SSN, so don’t be surprised if that happens. The TIN is a federal Tax Identification Number.
The 1099 form is the way the government is trying to track income which had been very hard to trace previously, and while there is some extra paperwork, the reporting data is not that hard to adhere to. Online File Taxes can help you with every aspect of your 1099 situation, and help you to make sure that you file the correct 1099 and that their reporting is accurate.
Some of the other 1099 forms are below:
• 1099-INT
• 1099-R
• 1099-B
• 1099-DIV
• 1099-C
• 1099-S
The letter designation behind the 1099 usually gives a clue as to what the form is for. 1099-INT, for instance, is issued by banks and other financial institutions to show how much interest income you’ve had – for instance, from a CD.
If you are forgiving, or canceling a loan, you will issue a 1099-C whether or not the person who had the loan can count that as income. The 1099-S deals with the sale of real estate, while a 1099-DIV deals with dividend income.
Also, as you draw money out of a retirement or pension plan, a 1099-R will be issued so that the taxes can be paid on the money drawn out.
The 1099 form, if used properly can be a good thing to your taxes – it is a much more reliable form of record keeping for expensing purposes. The penalties can be stiff, but if you are keeping decent records the 1099 reporting requirements will not add a huge amount of effort to your tax routine.
Online File Taxes can make sure that all your 1099 requirements are being met, and can do it in paper or e-filing form. Remember, if you have over 250 1099 forms, you must file them electronically.
Go to our website now to see how we can help you with the new 1099 requirements, and any tax service you may need!