Reporting 1099-MISC requirements
Your business may be required to send 1099-MISC forms to nonemployees such as independent contractors, vendors, etc. and to file these forms with the IRS. These forms are due a month after the new year starts and they take time to properly put together, so it’s beneficial to get the ball rolling early to eliminate the stress of filing on time and avoiding penalties.
There are several different types of 1099 forms according to what you need to report, so it is important to ensure you are using the correct form. Form 1099-MISC needs to be completed and filed by employers no later than January 31, 2020 for nonemployees who were paid at least $600 during 2019. Corporate service providers usually don’t have to be given a 1099-MISC, but there are exceptions so you should do the proper research to make sure you do or do not.
If you have any payments listed in box 7 for nonemployment compensation (NEC) on any of the 1099-MISC forms your company is providing, “Copy A” of the forms have to be filed with the IRS no later than January 31, 2020. Your business should give “Copy B” to each recipient. You can no longer file for an extension for these forms and there are late filing penalties in place if you miss the deadline.
The January 31 due date may be earlier than what you’re used to, as some deadlines for the 1099 forms were later a few years back. However, this January date allows the IRS more time to see errors on tax returns, to certify their legitimacy, and correctly give refunds to those who are eligible.
W-9 forms should’ve been collected throughout the year from any independent contractors that your business paid $600 or more. W-9s are needed for you to complete 1099-MISC forms, send them to nonemployees, and file them with the IRS. If you have not been gathering W-9s, you can use this link to the form so that you can request nonemployees to fill out the form: https://www.irs.gov/pub/irs-pdf/fw9.pdf.
Different deadlines for different reporting
Depending on what boxes your company has to fill out on a 1099-MISC form for different compensations, there could be different deadlines for when to file the forms. As mentioned earlier, you should do the proper research to ensure you’re submitting your 1099-MISC forms to the IRS on time for whatever type of payment you are reporting.
For the 2020 tax year, the IRS will be rolling out Form 1099-NEC for nonemployee compensation to help end any confusion with filing 1099-MISC forms that have to fill out box 7. This form will be due on February 1, 2021. However, you will still have to use 1099-MISC for 2019 taxes.
Reporting different nonemployee payments on a 1099-MISC form can be confusing. Contact us for help complying with requirements and properly filling out the forms.