Using the 1099 form is an increasingly regular practice among businesses of every type. Since the depression in 2008, 1099 use has increased across the country, with some markets seeing even more growth than usual. Over the past decade, people who primarily get paid by 1099s increased by 51% in Texas.
Much of that growth has occurred since the depression as companies don’t want to expand their payroll, but they need workers in critical areas, especially hi-tech and other areas of expertise.
As a result, there are more people using 1099 forms now that ever have before and more businesses that are paying those people. Many of these are small businesses, and are unfamiliar with the 1099 when it comes to tax filing issues. OnlineFileTaxes will be tackling issues dealing with the 1099 and the best way to make sure you follow the rules in this post and several following it.
The following is general information – for your specific taxes and tax situation, see a qualified tax preparer or accountant.
In this post we are going to be dealing with 1099 forms and when you need to file them. Once you have all your 1099 forms compiled, you will need to file them by February 28, 2013 if you are filing by paper. If filing electronically, they will need to be filed by April 1, 2013.
When sending copies to the people you have paid, January 31 is usually the date which you have to send their copies. This gives those people time to take care of their taxes.
Just like normal taxes, as long as it is addressed and mailed before the end of business on the last day it is considered filed on time. These dates do change from year to year, but fall regularly for paper filing in the last week of February and electronically typically a month after that date.
You will also need to send the recipients their 1099 form; this may be done by private company as well as the US Postal Service. Right now authorized delivery companies are DHL Express, Federal Express and UPS, but to fit within the guidelines you generally have to use next day or 2nd day air.
Depending on how large your company is and how many times they have used 1099′s you may have to file electronically. If over 250 1099 forms re to be filed by any company, they must file those forms electronically.
Filing for an extension on the 1099 deadline is quite easy and there is no explanation needed, just file the extension by the due date when the 1099 was going to have to be filed. The proper form for getting an extension is Form 8809, and this may be filed either electronically or on paper.
For individuals, the 1099 form has to be filed along with their general income tax. This will usually be done on a schedule C along with your 1040 form. Remember, even if you did not get a 1099 from a company that has employed you to perform work for them they have more than likely filed one with the government.
If you made income, you must report it. If the company which paid you reported this income by sending the 1099 to the IRS as they are required to do, that will be cross-referenced when your return is received. If you did not report the same amount of income, you can be charged with filing a false tax return.