When it comes to filing 1099s, you probably don’t relish the process. However, filing all your 1099s will be critical for your business. Failing to do so can result in fines and a big headache. If you are in the throes of 1099s preparation, we are here to help. Our easy online platform makes filing 1099s much simpler than ever before.
As you get ready to work on this project, check out the following five important facts that will help you file your 1099s like a pro.
#1: There Are Numerous Types Of 1099s
When referring to the 1099 form, there are actually a large variety of 1099s that might be in play. Each 1099 form is utilized for a specific situation or payout. For example, a contractor will receive a different 1099 from your business than a person who received dividends from your company. Understanding which form to fill out for each unique situation will go a long way in the successful filing of all your tax forms. Some of the common 1099s you might encounter include the following:
- 1099-MISC: the most commonly used 1099, this form reports commission paid to a freelancer or contractor who is not your employee.
- 1099-DIV: this tax form reports dividends and distributions paid to a person.
- 1099-INT: utilize this form when you pay someone more than $600 in interest.
- 1099-B: file this form to document proceeds from broker and barter exchange transactions.
- 1099-C: in the case of a cancellation of debt equally more than $600, this form will be utilized.
- 1099-R: fill out this form to report distributions of pensions, annuities, retirement plans, and other related distributions
- 1099-S: this tax form will be used to report process from real estate transactions.
As you can see, there are a variety of 1099s that you might need to fill out during tax season. Be sure you are clear on exactly which 1099s you are required to file and ensure you handle the process in a timely manner.
#2: Deadlines Must Be Met
When it comes to filing 1099s, one of the most important factors is your timing. There are strict deadlines that you need to meet in order to avoid penalties. File all appropriate 1099s by January 31, ensuring you provide documentation to both the IRS and the party in question. If you fail to meet the deadlines outlined by the IRS, you can face severe penalties. The more 1099s you have to file, the costlier procrastination will become. Not only will the IRS penalize you for being late, but you can also cause frustration to those who need to receive their 1099s prior to filing their own taxes.
#3: Don’t Skip Any Forms
It can feel overwhelming when you stare down the pile of tax forms you need to fill out. Due to the variety of 1099s, it can be tempting to just skip ones you are uncertain about. However, not filing the right forms can be a costly mistake. The IRS requires extremely accurate reporting, which means that overdoing it in regards to forms is better than underdoing it. Make sure that if you are in doubt about what 1099s you are required to file you seek the help of an experienced professional. While filing 1099s might not be your favorite activity, it is critical that you don’t skip a single form.
#4: Multiple Parties Receive The 1099
Don’t forget, in order for the 1099 process to be complete, the party in question needs a copy and you need to officially file the 1099s with the IRS. Skipping either side of this task could result in penalties, not to mention could be extremely frustrating for contractors and freelancers who depend upon receiving 1099s in order to file their own taxes. Be sure that you handle both filing with the IRS and mailing out copies to the respective parties at the same time to guard against forgetfulness or procrastination.
#5: Filing Online Provides Faster Results
One important fact to keep in mind during the upcoming tax season is that filing 1099s online will save you a massive amount of time. Rather than purchasing 1099s, printing them off, filling them out, and manually filing them with the IRS, you can utilize online e-filing to make the process simple.
For example, here at OnlineFileTaxes.com you can fill out anywhere from one single 1099 to hundreds through our platform. We make it simple to not only fill out all your 1099s in one place, but we also make filing a breeze. As an IRS approved e-file provider, we can automatically file your 1099s with the IRS as well as send out copies to the appropriate parties. This prevents you from remembering multiple steps and saves you copious amounts of time and money. File all your 1099s today in one easy place at OnlineFileTaxes.com