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.
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