2011 NEW COST BASIS COMPLIANCE LEGISLATION FOR FORM 1099-B

New federal requirements for cost basis tax reporting enacted in October 2008 require intermediaries to submit accurate and timely cost basis information to investors and the IRS. The change is the result of a government effort to end under and over reporting of capital gains and losses, while raising revenue to support The Emergency Economic Stabilization Act.

As a result of the new legislation, financial intermediaries will be required to report cost basis information to investors and the Internal Revenue Service for:

• Equity securities transactions on or after January 1, 2011.
• Mutual funds and dividend reinvestment plans on or after January 1, 2012.
• Debt securities, options and other specified securities on or after January 1, 2013.

The new regulations present an enormous challenge to brokers, banks, issuers, transfer agents, mutual funds and other intermediaries who must now prepare to provide cost basis information to millions of individual investors as well as the IRS. They must choose whether to build an in-house solution, buy a service from an industry vendor, or partner with a cost basis service provider. Firms need to focus on this now if they are to meet the deadlines set by Congress.

The new compliance requirement

The Emergency Economic Stabilization Act of 2008, enacted mainly to establish the

$700 billion bailout package contains new and stringent requirements on financial intermediaries such as issuers, transfer agents, brokers, banks, and mutual funds. In essence, the new legislation is an expansion of longstanding requirements that brokerages and mutual fund companies report gross proceeds. It has the practical effect of augmenting standing 1099-B income-reporting forms that brokerages are already required to submit simultaneously to investors and the IRS.

Schedule for implementation

The legislation establishes three stages of implementation for cost basis reporting:

• All equity stock acquired on or after January 1, 2010.
• All mutual funds and dividend reinvestment plans (DRiP) shares acquired on or after January 1, 2012.
• Other specified securities types, such as debt issues, options, private placements acquired on or after January 1, 2013.

BROKERS AND BANKS:

Compliance

Brokers, custodians and banks (herein referred to as brokers) have three years to implement systems upgrades to track and capture the adjusted cost basis information for securities transactions that occur for securities acquired on or after January 1, 2011, for form 1099-B reporting.

The form 1099-B will change to include the new information for adjusted cost basis. Brokers reporting directly to the IRS and the shareholder will need to retool the form printing process. Also, brokers must determine if they will buy, build or partner to handle the complexities of implementing an adjusted cost basis accounting system.

TRANSFER AGENTS

Compliance

Like issuers, commercial transfer agents will be required to report adjusted cost basis to the shareholder and the IRS through the updated form 1099-B. Transfer agents who are required to track and report adjusted cost basis include:

1. Transfer agents who administer dividend reinvestment plans, employee stock option plans (ESOP) and other such plans
2. Transfer agents who report gross proceeds of a sale of a security to a shareholder, and,
3. Generally, those transfer agents who now distribute form 1099-B.
   

For equity issues, transfer agents must begin to report adjusted cost basis on or after

January 1, 2011. For shares accumulated in dividend reinvestment plans, and possibly other plans such as ESOPs, transfer agents have until January 1, 2012 to begin reporting adjusted cost basis. Transfer agents that administer issuer-sponsored or “bank”-sponsored plans, (reinvestment plans, ESOPs and the like), will be required to report adjusted cost basis on the new 1099-B forms.

The form 1099-B will change to include the new information for adjusted cost basis.

Transfer agents reporting directly to the IRS and the shareholder will need to retool the form printing process.

EQUITY ISSUERS:

Compliance

The legislation obligates “brokers” to report adjusted cost basis to shareholders and the IRS for equity securities that have been acquired on or after January 1, 2011. The term broker is used generically in the legislation and can be misleading. The term refers to all financial intermediaries who report 1099-B financial information to shareholders. These intermediaries will be required to report adjusted cost basis. As the legislation is currently understood, those intermediaries include, but are not limited to, issuers, transfer agents, mutual funds, brokers, banks, and other custodians.

Issuers who will shoulder the additional burden of tracking and reporting adjusted cost

basis include:

1. Issuers acting as their own transfer agent
2. Issuers who administer their own dividend reinvestment plan, employee stock option plans (ESOP) and other such plans
3. Issuers who report gross proceeds of a sale of a security to a shareholder, and
4. Generally, those issuers that now report form 1099-B

For equity securities, issuers must begin reporting adjusted cost basis on or after January 1, 2011. For shares accumulated in dividend reinvestment plans, and possibly other plans, such as ESOPs, issuers have until January 1, 2012 to beginning reporting adjusted cost basis.

PENALTIES FOR INNACURATE REPORTING

The penalties can be very high, especially for those intermediaries that report inaccurate cost basis for a high number of investor/shareholder accounts. The penalty is $100 for each incorrect form 1099-B; $50 for the incorrect form sent to the investor/shareholder, and $50 for the incorrect form sent to the IRS. The maximum penalty is $350,000 a year.

About 1099online.com

1099online.com offers you quick and simple efiling of 1099-B forms through our advanced and secure efiling software. No need to download the software and no need to register yourself with the IRS FIRE system. It takes 3 simple steps to efile 1099-B form on 1099online.com and too for a cost as low as $0.55 per recipient. 1099online.com is an IRS certified efile provider to file 12 different 1099 forms which include 1099 misc form, 1099 K, 1099 INT, 1099 DIV, 1099 A, 1099 B, 1099 C, 1099 S, 1098, 1099-patr, form W2G and etc.

New form 1099 filing due dates and penalties for year 2011-2012

In less than a week, businesses would have to gear up to file their 1099 forms. 1099 forms were basically started by the government as an effort to curb the tax gaps that are taken place. The reason why tax gap had occurred was because of the income earned by non employees/freelancers and thus was gone unreported to the government. Hence 1099 forms were designed so that any payments of $600 and above made to independent contractors was reported on 1099 forms and thus filed with the IRS for the income tax purposes.

It is very necessary that 1099 forms are filed correctly and on time. If both these conditions are not met, then one can face huge penalties. The new penalties for 2011 form 1099 for year 2012 are as under:

If you fail to file a correct 1099 form by the due date, and cannot show reasonable cause, you may be subject to a penalty that broadly falls under categories listed below:

• —        Failing to file by the due date and you don’t furnish reasonable cause to justify the delay
• —       Failing to file paper forms that are machine readable
• — Failing to include all required information
• —       Failing to meet electronic filing requirements
• —       Failing to include information that is correct
• —       Or failing to report TIN or reporting an incorrect TIN

The amount of the penalty is based on when the correct 1099 is filed:

—    $30 per return if you correctly file within 30 days of the due date (by March 30 if the due date is February 28). The maximum penalty is $250,000 per year ($75,000 for small businesses).

—    $60 per form if you correctly file more than 30 days after the due date but by August 1; maximum penalty $500,000 per year ($200,000 for small businesses).

—    $100 per information return if you file after August 1 or you do not file required information returns. In this case the maximum penalty is $1,500,000 per year ($500,000 for small businesses).

If you do not file corrections and you do not meet any of the exceptions to the penalty described above, the penalty is $100 per information return.

DUE DATES TO FILE 1099 FORM:

1. —        January 30^th 2012- Due date to provide 1099 form to recipient
2. —        February 28^th 2012 – due date to paper file 1099 form
3. —        April 2^nd 2012- Due date to electronically file 1099 form

2011-2012 brings new 1099 filing tax laws for Farmers.

A 1099 tax form is an informational reporting form which is required to be filed with the IRS if any payment of $600 and above has been made by businesses or individuals to independent contractors in year 2011. The type of payments that are legible to be filed on form 1099 are: Rent, health care payments, services offered by freelancers, attorneys, royalties, Payments to crew members by owners or operators of fishing boats and etc.

In the case of agricultural sector, a farmer would have to file tax form 1099 for year 2011 if they want to write off the cost of the custom hay baling they had done this year. Services that require a farmer to file a 1099 form include: painting the barn, hoof trimmers or certified crop consultants.

Services that exempt you from filing 1099 forms include hauling freight which means livestock hauling or grain hauling is not required to be reported on 1099 form. Moreover, 1099 filing is not required to be reported for the purchase of equipment parts, seeds or fertilizers. Also a farmer is not supposed to file a 1099 form is he spends less than $600.

It is very necessary that farmers maintain their books on the payments they have made for year 2011-2012 because if they fail they file 1099 forms with the correct information then it can cost them huge penalties and losses.

Failure to file a 1099 form, could cost a farmer fine of $100 per form. If the internal revenue finds out that it was a willful neglect on the part of the farmer to file the 1099 form, then it can result in greater costs for the farmer in the form of $250 per filing. Sadly, small farmers who are unaware of such information fail to file the 1099 forms and thus have to face great adversities.

If business is not incorporated, then a 1099 form is required for all service providers. If the farmers are not incorporated, then they need to ask the business doing the service for their social security number (SSN)

Moreover, if a farm owner acquired above $600 as rent, then it is mandatory to file a 1099 form. Farmers have to talk to their landlords in order to get their 1099 forms.

1099 forms were started by the IRS as a step to fill the tax gap. Most of the income earned by non employees/freelancers was being unreported and hence resulting in huge tax gap for thee government. In order to narrow the gap, Congress came up with the 1099 forms.

For year 2011-2012, a 1099 form has to be sent to the recipient no later than January 30th 2012. There are 3 copies of the 1099 form. One is kept by the payer, one is sent to the recipient and the other copy is filed with internal revenue service.  Businesses are supposed to file the 1099 form with the IRS no later than February 28th 2012. However if you efile 1099 form which obviously is a better choice, then the due date would be April 2nd 2012

Electronically filing a 1099 form is a very easy and effortless method as compared to the paper filing method. Nowadays IRS has made it compulsory for businesses who have to file 250 1099 forms to electronically file them. If you fail to do so, then penalties are imposed on you. Also if you are filing less than 250 1099 forms, still you are encouraged to efile as it is cost effective, quick, and secure and provide IRS confirmation in less time than anticipated.  You can either efile through the IRS website or make use of an IRS certified efile provider such as 1099online.com to efile your 2011 form 1099 efficiently.

 

 

 

How to get your 2011 form 1099 misc electronically filed in minutes

Every year businesses have to file 1099 misc forms with the IRS to report Incomes they have paid to independent contractors/individuals for services rendered by them. 1099 Misc forms are basically filed for those individuals who are not part of the company, yet have provided their services and thus have received $600 and above from the company in form of compensation.

Traditionally, form 1099 misc was filed by businesses using the paper filing method where you would have to manually enter all the data and submit it to the IRS along with form 1096. Paper filing method can turn out to be quite cumbersome and painful if there are hundreds of 1099 misc forms to be filed. Moreover, paper filing method can also turn out to be very costly as you would have to spend on postal stamps and mailing services. Not only that, but have you ever realized how much paper is wasted to file 1099 forms on paper. Millions of paper is wasted each year to file 1099 forms be it a new form or corrected form. Do you know what it means to waste so much paper? Wasting paper means we are wasting our environment. Thousands and thousands of trees are sacrificed just to produce few tons of paper. We eliminate trees, we eliminate our environment.

Hence in order to eradicate the complexities arising out of paper filing method for 1099 forms, IRS came up with the best solution ever; EFILE method of paper filing. Electronic method of paper filing is by far the most suitable solution to file 1099 forms. Efile method has not only helped to solve the problem of filing 1099 forms quickly but it’s one of the safest and easiest solutions for 1099 filing. On top of that, no paper usage means nil environmental damage. Moreover, if you efile 1099 misc form, it takes minutes to fill your form and submit it to the IRS. IRS receives your submission within the same day and sends you IRS acceptance confirmation within 24 hours.

Now, there are 2 methods to efile 1099 misc forms.  First method would be to efile 1099 misc form directly with the IRS FIRE system and the second step would be to efile 1099 misc form through an IRS authorized efile service provider.

STEPS TO EFILE 1099 MISC WITH THE FIRE SYSTEM:

1. Purchase and install a software program that will create and transmit 1099 forms in the proper electronic format.
   
   
2. Request a transmitter control code (TCC) by filling out IRS Form 4419, "Application for Filing Information Returns Electronically." You will need to provide basic information such as your business name and address. You also must include your Employer Identification Number (EIN). If you do not have an EIN, you must obtain one before submitting Form 4419.
   
   
3. Mail or fax the form to the IRS at least 30 days before the deadline for filing 1099s. The IRS will send your 5-character transmitter control code by mail once the application is approved.
   
4. Create an account on the FIRE system. You will enter your company name, company address, company phone number, contact name and email address. You can create the account before you get your transmitter control code.

5. Prepare your 1099 information for transmittal using the features of your software program.

6. Transmit your 1099 forms to the FIRE system once you have received your transmitter control code and entered it into your software program.
   

STEPS TO EFILE 1099 MISC WITH AN EFILE SERVICE PROVIDER

1. Select your preferred IRS certified efile provider for 1099 misc form filing

2. Register with the service provider

3. Select the 1099 misc form from the list of 1099 forms service offered by the service provider

4. Fill in your 1099 misc information.

5. Click on the Submit to IRS button and your returns are transmitted to the IRS. A confirmation email will be sent to you about the status of your submission

And that’s it……

Now, which one do you think is the easiest step of all? Second one, isn’t it? You don’t have to purchase any software; you don’t have to fill any 4419 form; you don’t have to go through any cumbersome steps. Using an efile service provider is so simple because you just have to fill out your information and they do the rest. They transmit your information to the IRS through the FIRE system and send you IRS acceptance e-mail. There are some providers such as 1099online.com who even print and mail 1099 misc forms to the recipients. However, before selecting on a service provider make sure they are IRS approved and have an IRS authorized logo on their website.

1099 filing season starts January 2012

2 weeks more and that’s it…2011 ends after 15 days and we welcome 2012 in our lives with new beginnings, new activities, new promises and resolutions and not to forget a new filing season. January 2012 is not only a time for celebrations but also a time to gather your papers and yourself to begin your income tax filing. But before that, if you are self employed or provide your services on freelance basis, then your hiring company would definitely provide you form 1099 Misc. Wondering what is form 1099 misc and why should I receive it? Ok, so here’s the answer to that. 1099 Forms are basically designed for freelancers or self employed who render their services to companies and in return receive remuneration of $600 and above. If you fall into that category then a 1099 misc form is sure to come your way.

Once you receive 1099 misc form, then at the time of filing your income taxes with IRS, you have to show the 1099 misc form as well. This will allow you and the IRS to figure out your taxable income. 

As I said earlier, tax 1099 forms are designed for freelancers and independent contractors. A person falls under the category of an independent contractor/freelancer if he sets his own schedules, works at his own timings, location and is free to work for other individuals or businesses that suit his needs. If issues arise in any of the conditions or the person is being directed with any of the conditions then he is deemed as a employee of the company and is not liable to receive 1099 misc form but rather will receive a form W2 (for employees)

IRS Requirements for 1099 online filing

Every year businesses have to prepare a vast number of 1099 forms and provide a copy of each 1099 form to their payees/recipients, so that they can use it for their income tax purposes. Moreover, besides providing a copy to payees, businesses also have to file one copy with the internal revenue services for their record. Considering that businesses have to prepare a huge number of 1099 forms every year, thus IRS has made it compulsory that businesses who have to file 250 and above 1099 forms will have to mandatorily use electronic filing system to file 1099 misc forms. Efiling 1099 forms is actually a quick, easy and secure method to file tax form 1099 misc. Filing deadline for 1099 electronic filing payers is April 2nd 2012. Although you can efile 1099 forms on your own, but it would require you to download the software and then efile. However, one such company that has come up with advanced efiling software for 1099 filing is 1099online.com. You can learn more about their efiling offerings and services at 1099online.com.

Detailed information on different types of 1099 forms

Receiving 1099 form and reporting it to IRS is not an uncommon thing. 1099 form is used to report various incomes other than wages, salaries and tips for which form W2 is used.  1099 forms are given to individual contractors for services rendered by them to small businesses. Businesses provide a 1099 form only if the individual contractor has earned an income of $600 and above. If not, then no 1099 form is required. However there are various 1099 forms for different purposes. Below is the description provided for 4 types of 1099 forms:

Form 1099 Misc - The Form 1099-MISC is used to report miscellaneous income for individuals and companies who have been paid $600 or more in non-employee service payments during a calendar year. In other words, Form 1099 Misc is usually given to independent contractors such as attorneys, freelancers, health care service, performers, rent and etc who have provided their services to the company and in return have received compensation of $600 and above. 1099 forms are issued by the government to ensure that no income is gone unnoticed and hence is reported to the IRS for income tax purposes. Form 1099 Misc has to be given by the business to the payee by January 31 2012 and it also has to be reported to the IRS by April 2^nd 2012, if you are filing electronically.

Form 1099 K – A New 1099 form which is debuting from 2012 onwards is FORM 1099-K which is used to report merchant card and third party network payments. The form is required for reporting payment transactions.  Payment transaction is when a payment card (credit card) is used to make a payment or any settlement through a third party payment network such as e-bay, pay pal and etc. Thus, people who have a pay pal account, credit card account or any such similar account will receive 1099 K at the end of the year. Businesses would have to report 1099-K form only if they have gross receipts of $20,000 and above or 200 and above transactions. 1099online.com is the first company to go live with the e filing software for 1099 K forms.

Form 1099 Div – Form 1099 DIV ‘dividends and distributions’ is the official form which is used to report all taxable capital gains and dividends paid to an investor, including those that have been re-invested in a given taxation year. The amounts stated on the 1099 DIV form represent the amounts that fund companies are attributing to each investor's investment return for the year and reporting to the IRS. Investors use Form 1099-DIV to help report income received from investments on their tax return each year.  Get more information on 1099- Div at http://www.irs.gov/pub/irs-pdf/i1099div.pdf

Form 1099 INT – The official 1099 INT form is issued by payers of interest income to investors at the end of the year. Payers have to issue the form to those they paid at least $10 of interest during the year. The payers in this case include banks and savings institutions. Interest income reported on Form 1099-INT includes interest paid on savings accounts, interest-bearing checking accounts, and US Savings bonds. This Form is also used to report other tax items related to your interest income, such as early withdrawal penalties and federal tax withheld. The form has to be filed with IRS by April 2^nd 2012.

 The next filing season for 1099forms starts January 1^st 2012. Businesses have to ensure that they provide the correct and required 1099 forms to the contractors/payee by January 31^st 2012. Businesses also have to efile 1099 forms with the IRS compulsorily. The filing deadline for paper filers is Feb 28^th 2012 and for electronic filers is April 2^nd 2012. 

This is a copyrighted© article written by ‘Diva A’ who is associates with www.1099online.com. No permission is granted for commercial use. You may reproduce this article with written consent from the TRS Holdings, Inc, parent company of 1099online.com by emailing to wecare@1099online.com or by calling at 800-578-2290

Form 1099 Misc is not the same as form W2

It’s the year end payroll filing season and you wondered why your company gives few people form W2 and to other it gives form 1099 misc? Well, Simple answer. Some people in the company are permanent employees and others are employed on a contract basis. What I mean to say is that if you receive form W2, it gives you the status of being a permanent employee of the company and if you receive form 1099 misc it suggests that you are self employed and your services are hired by the company on a contractual basis.

                                         

Businesses Report the income of their employees on Form W2. This form reports total income, Social Security and Medicare Income, and it reveal how much has been withheld from employee pay for federal, state and local taxes. Form W2 is given to the employees no later than January 31^st. Businesses have to efile form W2 of its employees with the IRS by March 31^st 2012 (As the filing deadline falls on Saturday, hence the IRS has changed the filing deadline to April 2^nd 2012). If you want to file through paper then the last date is February 29^th 2012. However, it is always advised that you opt for Efile over paper filing not because IRS recommends it but compared to paper filing, efiling is not at all complex but rather quick, and secure and IRS confirmation is sent via secure email in less time.

Unlike form W2, 1099 misc form is given by businesses to individuals whose services is hired for a short period of time on contract basis. Such individuals are called as independent contractors. Independent contractors are those individuals who do work for your company but who are not employees. You don't report withholding or Social Security/Medicare wages because you don't withhold income taxes for independent contractors and you don't deduct Social Security and Medicare from their payments. Businesses have to file form 1099 misc for independent contractors if income of $600 and above has been paid to them. 1099 misc has to be given to individuals no later than January 31^st 2012. 1099 forms have to be electronically filed with the IRS as well no later than April 2^nd 2012. Paper filing option is also open for which the last date is February 28^th 2012. However, it is always advised that you opt for Efile over paper filing not because IRS recommends it but compared to paper filing, efiling is not at all complex, quick, and secure and IRS confirmation is sent via secure email in less time.

Moreover, you can file electronically through the Filing Information Returns Electronically System (FIRE System); however, you must have software that can produce a file in the proper format according to Pub. 1220…It’s not that simple to use that software without any guidance. There are service providers for 1099 online filing but they only offer you the option to download the software and use it. That can be very complicating process and not a reasonable one. But one such IRS certified efile service provider that I came across is 1099online.com. You can efile and submit form 1099 Misc and other 1099 forms without having to download any software and without having any know about technicalities. 

So now that you know the difference between tax 1099 misc and form W2, you can know better which one is for you and why.

This is a copyrighted© article written by ‘tax master’ who is associates with http://www.1099online.com/. No permission is granted for commercial use. You may reproduce this article with written consent from the TRS Holdings, Inc, parent company of 1099online.com by emailing to wecare@1099online.com or by calling at 800-578-2290

What is a 1099 misc- Tax Form 1099, How to file a 1099?

The 1099 IRS federal tax form is used to report income to the government that does not come from wages, salaries or tips. Two papers will be made, one for the payer and one for the payee. The form 1099 is usually used by independent contractors who are non-employees.

If you own your own business and sub-contract yourself out to render services to a client of yours, then they may give you a 1099 tax form at the end of the year. Their accountant will send it to you with all of the accurate information about you and how much money you made during the year.


Income Other Than Wages Salaries and Tips
The 1099 tax form will have the name of their corporation, LLC or business name and it will also have your information on the 1099 form. The total amount of money you made from them will be the information the IRS will count as income made by you.
If you have paid a contractor at least $600.00 for the year, then you will give him or her a 1099 tax form. If you have received $600.00 or more from a client you rendered services to, then you should receive a 1099 form from the client. If they don't 1099 you, then you must still report the income on your federal tax return form.

Electronic Filing of IRS Federal Tax Form 1099
If you are the payer and you have 250 1099 forms or more, you must file the 1099 tax forms electronically. If you have less than 250 and you file in paper form or you may also chose electronic filing method, For more information on all of the 1099 tax forms, you may need to visit 1099online.com.

Payee, Freelancers, Sole Proprietorship, Self-Employed
If you are the payee, then you will use the information on the 1099 tax form to complete your own income tax return form. You will have to attach the 1099 tax form to your tax return. What you will probably do is file a 1040 with a Schedule C attached. This is the way most self employed (Sole Proprietorship) people file their federal income taxes.The 1099online is user friendly website where you may file the form 1099 very quickly and accurately.

IRS proposed regulations on form 1099 K

1099 K which IRS starting to track the merchant card and third party transactions for the calendar year 2011 which has to be reported early 2012 to IRS. IRS posted this article on the proposed regulations for merchant card and third party transactions.

The Internal Revenue Service proposed regulations under a new statute requiring that, starting with transactions in calendar year 2011, the gross amount of payment card and third-party network transactions be reported annually to participating merchants and the IRS.

The provision was enacted as part of the Housing Assistance Tax Act of 2008 and is designed to improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete.

“Time and time again, we have seen that better information reporting helps the tax system work better by ensuring that everyone pays what they owe,” said IRS Commissioner Doug Shulman. “The new law gives us an important new tool for closing the tax gap and also provides business taxpayers better documentation to compute and report their income and expenses. The IRS will work closely with stakeholder groups to ensure a smooth implementation of this new program.”

These proposed regulations, posted today on IRS.gov, propose rules to implement reporting of credit card, debit card and similar transactions, as well as transactions settled through third-party payment networks, such as third-party organizations that settle online transactions. The IRS also released for comment a draft version of new Form 1099 K, Merchant Card and Third-Party Payments, which will be used to make these reports.

The new law requires banks and other payment settlement entities to report payment card and third-party network transactions with their participating merchants. The IRS emphasized that individual cardholders are unaffected by this requirement, and none of the cardholder’s personal information will be shared with the IRS.

The IRS has created Form 1099-K, which is similar to the existing Forms 1099 used to report interest, dividends and other payments. The first information return covering calendar year 2011 must be filed with the IRS and furnished to participating merchants in early 2012.

1099online.com is IRS certified efile provider for all the 1099 forms, one of the first site to site for the IRS new form 1099 k.

Changes in 2011 form 1099 reporting

In 2012 all businesses will face an increased burden related to Form 1099 informational reporting requirements. In 2011, any recipient of rental income will be considered to be engaged in a trade or business and will be subject to Form 1099 reporting rules.


1099 Changes in 2011 reporting

The Small Business Jobs Act of 2010 included increased reporting requirements that will impact persons receiving rental income. Specifically, payments made after December 31, 2010 for rental property services totaling $600 or more to a single payee will need to be reported to that payee on a Form 1099 MISC. For example, if a rental property owner hires a ABC to fix the wash room sink in a rental property for $605 dollars, he will be required to issue ABC a Form 1099 MISC for 2011.

Furthermore, the penalties related to delinquent and omitted Form1099 filings have been increased.

However, there is one bright spot in the numerous changes discussed above.  The IRS issued regulations that exempt payments made after December 31, 2010 by debit or credit cards from Form 1099 reporting requirements since these payments will already be reported under Sec. 6050W by the payment processors. In summary, the impact of these changes will be significant as businesses may need to gather taxpayer information numbers from additional vendors/service providers, maintain more detailed records, and issue a greater number of Forms 1099.  It is worth noting that there have been proposals in Congress to reverse or reduce all or a portion of the additional reporting requirements.

Thus, one should continue to monitor the requirements for any changes.

1099-MISC forms due by January 31

Yes, but you do have some twist room up until February 28..................... Until March 31 if you e-file. 1099-MISC forms are supposed to be sent to recipients no later than January 31, but the true deadline is February 28. That is the deadline for mailing your 1099s to the IRS. You have until March 31 if you submit 1099s electronically.

Follow these steps to file 1099-MISC forms on paper by February 28. Time is of the essence.

First, Check out how the buying the form works

This may not be as simple as it sounds. 1099 forms cannot be downloaded from the Internet like most tax forms, because they are red, scannable jobbers. You can get right down to your local office supply store and buy them but those forms very difficult make the paper filing and also lot of paper work has to do. Those blanks will be quite expensive. This step will not possible to file the form 1099 misc.

Second, Use 1099 efile service providers

1099online.com is the best site where you find easy navigation to enter the information for preparing the form and efiling with IRS as well as email to payee. If payee doesn’t have the email very quick methods download the form from the website also find an attached document in the registered email after the submission.

There is no particular software that you need to install into your system, no downloading work, no paper work, no service problem. Well professional accountants support filing the information. The most important is while filing the form with 1099online.com is lowest filing fee in the industry and time saving process.

If you more question on this please do contact our support team to get more information.

what is form 1099 K- Instructions of 1099

In this year 2011 there will be a new tax form IRS is starting up that is form 1099 k. This form is there show up all the often transactions done by the small business which they don’t report their revenue to IRS now there is no hiding from IRS any more. What small companies do is they don’t often report all their transactions to IRS whenever they use their credit or debit cards revenues or revenues from the third party payments like ebay or paypal

Accept as true or not till now the IRS has been taking the word of the business owner that he is reporting all of his income because they did not have access to the credit card revenues of small companies. There was only one way to check if a company was cheating on its taxes was to do an audit. It is impossible for IRS to audit every year every small business owner about their transactions. It is not a very full proof system although most people don’t mind that.

Now with this new form 1099 k the gross amount of credit card, debit card, and third party transactions will have to be reported out correctly. We believe that this new form 1099 k will lead to better tax passivity amongst small businesses owners.

1099 dead line - 1099 filing

The IRS deadline to electronically file your 1099 form is March 31, 2011. As Per IRS regulations any person/s required to file 250 returns or more must file those returns electronically. Others with less than 250 returns may also choose to electronically file their returns. Filers whom fail to file a correct information return by the deadline may be subject to a penalty. Penalties vary and are based on the date you file your correct return.
The penalties are:

$15 per information return if you correctly file within 30 days; maximum penalty $75,000 per year ($25,000 for small businesses)

$30 per information return if you correctly file more than 30 days after the due date but before August 1; maximum penalty $150,000 per year ($50,000 for small businesses)

$50 per information return if you file after August 1 or you do not file required information returns; maximum penalty $250,000 per year ($100,000 for small businesses)
The 1099-MISC is a form used to report to the IRS income paid to an independent contractor. It is also used to report rent, royalties and a variety of other types of income. For independent contractors who work from home, often in freelancing or consulting, it is commonly used to report nonemployee compensation. It is used to report miscellaneous income, such as income earned as a non-employee, as well as fees, commissions, rents, or royalties paid during the last tax year. Payments for prizes, awards, legal services, and other non-employee activities may be reported on this form as well.
If you want file electronically form 1099 you need not to download any software, it is very simple and easy navigation prepare form online and report to the form to IRS in few minutes. On 1099online.com you just need to enter the information of your business then system automatically generates the form for you to download and give to your payee or or contractor also it sends your information to IRS. Don't struggle with buying forms and forget about the typewriter. Filing 1099-MISC forms is easy, fast and secure with 1099online.com. Easily enter data online and let us electronically file with the IRS, plus download and email or mail your recipient copies

Form 1099-K report sales transactions

Starting in January 2012, businesses that accept credit and debit cards when making sales to customers will receive an IRS tax form 1099 K from their credit card processing company. The 1099-K will report the total payment transactions for the year 2011. The new reporting requirement is part of on-going government efforts to increase collection of income tax.

Not only must banks and credit card processing companies comply with the new reporting requirement, third-party networks such as PayPal and eBay, Inc. must also report total credit card transactions to their business customers who use their services to process online sales. Compliance may prove to be a major adjustment for these entities. PayPal, a subsidiary of eBay, Inc., generated more than $31 billion in total net payments in 2009, according to eBay’s annual report for that year.

Exemptions

Not every merchant will receive a form 1099-K; only those who generated both a minimum of 200 transactions and $20,000 or more in sales. Casual sellers should keep in mind that even though they may not receive a 1099-K, their sales income is subject to income tax and must be reported on their tax return. Knowing whether your online garage sale qualifies as a business in the eyes of the IRS can be tricky. But if an online garage sale turns into a business with recurring sales and purchases of items for resale it may be considered an online auction business and the complexities can be manifold.

form 1099 - How to file 1099 online

Form 1099 MISC is the income earned will be entered, but there will not be any tax deductions for federal and state income taxes, nor will any compensation, social security, or medical deductions be taken. Since the 1099 recipient is not an employee of the business, the business is obligated only to tender the income to the contractor sans any deductions. This1099 income is also reported to the Internal Revenue Service so it has the opportunity to track income from freelance workers. The freelancer will be obligated to make his or her own tax deductions and forward such payments to the IRS.

Income and taxation, corporations, small businesses, and other employers use a variety of forms to record the income earned by an employee or an independent contractor. Typically, employees of a business receive a W-2 form that lists the income they received during the year. This form also contains deductions taken from that income in the form of federal and state taxes, deferred compensation and social security contributions, to name a few. 1099 forms are used for a number of reasons, though, typically, they are given to independent contractors record of the income they received from a particular business.

Those who receive 1099  come from a wide spectrum. More and more businesses are bringing in independent contractors to work on a similar "per job" basis, as this helps keep the employer costs down since the employer does not have to pay for such things as health and life insurance, as well as make contributions to retirement plans. After the job is completed, the employer can cut the cord and simply issue the independent contractor a 1099 Form.

Though the 1099 MISC Form is the most popular, 1099 forms are also issued to denote the interest (1099 INT) the government may have paid in a particular tax year, and 1099 G Form denotes any tax refund you may have received from the government.

Only three steps Efile form 1099 on 1099online.com

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Entering the 1099 Data

Efile the form to IRS 

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IRS form 1099-K Requirements started in 2011

New IRS form 1099 K ongoing in 2011, if a business processes credit cards as a form of payment, credit card processor must issue you a form 1099-K for the gross amount received if you processed more than 200 payments AND for more than $20,000. The IRS tax form 1099-K was formed as part of the Housing and Economic Recovery Act of 2008 to increase compliance in reporting sales income by merchants. Because the IRS also gets a copy of the form, it will help the agency to determine whether or not business owners are reporting correct sales figures on their tax returns.

If you are an online seller and meet these thresholds, you are more than a “casual seller” and you may consider starting a business entity to protect your identity and for tracking your expenses to offset the revenue that will be reported on your 1099-K. It will be for the gross amount and will not include a reduction for their fees. If you did not already know, effective in 2011, Form 1099-K is required for “reportable payment transactions.” In other words, most payments for goods and services paid by payment card (including credit and debit cards and some stored value cards) or third party networks will now be reported to the IRS via a new Form 1099-K, Merchant Card and Third-Party Payments.

Regarding 1099-K reporting requirements: “The reporting threshold is an aggregate value of third-party network transactions for a merchant of $20,000 or more for the calendar year and aggregate transactions of 200 or more. This reporting requirement is effective for sales made on or after January 1, 2011.

1099 online – form 1099 efiling

1099online.com is a product of TRS holdings, Inc; We are the US based company have over 8 years of experience in tax filing and services. Hence, with our experience, we guarantee that e filing IRS form 1099 is quick, simple and accurate and on top of that you get the best and responsive customer support service from our very friendly and tax pro team.

When working as a freelancer or independent contractor, clients are required to provide you with a 1099 form at the end of the calendar year. The form is required when total compensation exceeds $600 during each tax year. A copy of the form is submitted to the IRS to help track miscellaneous income. Although there are variations of the 1099 to show interest and other types of payments, Form 1099-MISC is used to report payments to independent contractors.

On a 1099 MISC Form, the income earned will be noted, but there will not be any deductions for federal and state income taxes, nor will any deferred compensation, social security, or medical deductions be taken. Since the 1099 recipient is not an employee of the business, the business is obligated only to tender the income to the contractors any deductions. This 1099 income is also reported to the Internal Revenue Service so it has the opportunity to track income from freelance workers. The freelancer will be obligated to make his or her own tax deductions and forward such payments to the IRS.

Deadline to electronically file your 1099 form is March 31, 2011. As Per IRS regulations any person/s required to file 250 returns or more must file those returns electronically. Others with less than 250 returns may also choose to electronically file their returns. Filers whom fail to file a correct information return by the deadline may be subject to a penalty. Penalties vary and are based on the date you file your correct return.