1099 Forms Are Due by January 31st if Filed Electronically

Don’t forget! 1099 forms are due to necessary parties by January 31st if filed electronically.
If you’re filing a paper 1099 you have a little more time – it needs to be postmarked by February 28th.
Form 1099-MISC is a tax form used to report various types of income that individuals or businesses receive during the tax year.

File Form 1099-MISC for each person to whom you have paid during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
    • Payments to an attorney.
    • Any fishing boat proceeds.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

Here are some key points to know about Form 1099-MISC:

  1. Income Reporting:
    • It is used to report miscellaneous income, such as non-employee compensation, rent, prizes and awards, royalties, and other types of income.
    • Starting with tax year 2020, non-employee compensation (such as freelance or independent contractor payments) is reported on Form 1099-NEC, which is separate from Form 1099-MISC.
  2. Filing Thresholds:
    • You are required to issue a Form 1099-MISC if you paid $600 or more in rents, services, prizes and awards, or other income payments during the tax year to an individual, partnership, or estate.
    • The $600 threshold does not apply to payments for legal services, which must be reported regardless of the amount.
  3. Due Date for Filing:
    • As of my last knowledge update in January 2022, the deadline for furnishing Copy B of Form 1099-MISC to the recipient is January 31st. The deadline for filing Copy A with the IRS is also January 31st.
    • Electronic filing with the IRS is encouraged and may have the same deadline. However, check the latest IRS guidelines for any changes.
  4. Penalties for Late Filing:
    • There can be penalties for not filing 1099-MISC forms on time or for incorrect information. The penalties vary depending on how late the filings are and can be substantial.
  5. Different Boxes for Reporting:
    • Various boxes on Form 1099-MISC are used to report different types of income. For example, Box 1 is for rents, Box 7 is for non-employee compensation (prior to tax year 2020), and Box 8 is for direct sales of $5,000 or more.
  6. Form 1099-NEC for Non-Employee Compensation:
    • As mentioned earlier, non-employee compensation is reported on Form 1099-NEC starting with tax year 2020. Make sure to use the correct form for the type of payment you are reporting.
  7. State Reporting Requirements:
    • Some states also have their own reporting requirements for miscellaneous income. Be aware of any state-specific rules that may apply.

Always consult the latest IRS guidelines or seek advice from a tax professional for the most accurate and current information regarding Form 1099-MISC and other tax reporting requirements. We provide 1099 preparation services. If you need assistance or have questions, please give this office a call or email (206) 838-3800 — info@ygacpa.com.

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