1099 Forms Are Due Soon

It's a new fiscal year, which means it's time to start filling out and filing your 2012 1099 forms if you want a stress-free tax season.

As you probably know, small business owners file self-employment taxes every fiscal year.  Among the requirements: You have to file a 1099 form for any taxable income that doesn't show up on a W-2 form.

You can spend hours reading through the IRS' website about all the changes and updates. To help you out, here are three tips that every small business owner should know:

·         Make sure you send and receive the correct 1099 forms. There are many different types of 1099 forms, which the IRS refers to as "information returns." Most must be mailed to recipients this month, and then reported to the IRS in February. For employers who deal with independent contractors, Form 1099-MISC should be on your to-do list right now; you may also soon be receiving a Form 1099-K from each third-party payment processing service that you used in 2012.

·         1099-MISC forms should go out now. Business owners have until Jan. 31 to send out 1099-MISC forms to any individual who was paid $600 or more for services in the past year. This doesn't apply to corporations or LLCs that were paid for services, but it does apply to contract employees and individual contractors. You then have until the end of February to file the forms with the IRS. But make sure you give the payee time to review the 1099-MISC and correct any mistakes.

·         Pay attention to the 1099-K. This month, most businesses should receive a 1099-K from every payment processor you worked with during the year. This includes banks, credit card companies, and services like PayPal. The 1099-K was introduced last year, and it's only for businesses that sell more than $20,000 in goods or services through at least 200 transactions in a calendar year. Business owners should use their 1099-K forms as a way to check their calculations when completing their tax returns

WHO SHOULD FILE 1099 FORMS

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 2012. The type of payments that are legible to be filed on form1099 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 2012 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 2012-2013 because if they fail to 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 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 the government. In order to narrow the gap, Congress came up with the 1099 forms.

For year 2012-2013, a 1099 form has to be sent to the recipient no later than January 31st 2013.

 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 2013. However if you efile 1099 form which obviously is a better choice, then the due date would be April 1st 2013

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 e-file as it is cost effective, quick, and secure and provide IRS confirmation in less time than anticipated.  You can either e-file through the IRS website or make use of an IRS approved e-file provider such as 1099online.com to e-file your 2012 form 1099 efficiently

FORM 1099 MISC COMPLETE GUIDE – 1099 misc forms, form 1099 misc filing requirements, 1099 misc form due dates and penalties.

Now and then, we see someone asking a query on yahoo answers, ask.com and other websites about 1099 misc form. When a person received 1099 misc form, they are surprised and immediately post ‘Why did I receive a 1099 misc form’? Not only that but the search engines and filled with questions regarding 1099 misc forms, 1099 filing requirements, best way to file a 1099 misc form, due dates and penalties for 1099 filing and more. The list of questions is endless.

So here I am today, ready to answer all your doubts and questions about 1099 misc forms.

WHAT IS FORM 1099 MISC?

1099 misc form is used to report certain types of payments made in the course of a trade or business. If you're a small business owner who has hired the services of an independent contractor or freelancer, you may need to file and submit the 1099 misc form to both the Internal Revenue Service and the person or business that you paid. Normally, a 1099 misc form has to be reported if at least $600 has been paid to the recipient.

Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d), farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts. Payments by federal, state, or local government agencies are also reportable.

IS FORM 1099 MISC VALID FOR EMPLOYEES OF A FIRM?

No, if you are employed by a firm or a registered corporation, then you are not suppose to file form 1099 misc. If you are providing services to a company as an employee and receive 1099 misc form, then it is a mistake on the part of your employer and you must correct it. As an employee, you are supposed to receive form W2 for your income tax purpose.

WHAT DO I DO WITH 1099 MISC FORM AFTER RECEIVING IT?

Because you are an independent business person, working for yourself and are not registered as acorporation, partnership or multi-owner limited liability company and you were professionally hired by a company on a contract basis; you are legible to receive form 1099 misc by January 31st2013. You would need that 1099 misc form to report your income to the IRS for your tax filing purposes.

Now when you get a 1099 misc form, take a look at Box 7, “Nonemployee compensation.” This is where your annual income from the company that hired you will be reported. And this is the income that you must be sure to include on your Schedule C, because not only did the company send you a 1099 misc form but also filed it with IRS. Hence, the 1099-MISC serves the same function for the self-employed as a W-2 does for the employee. It tells you and the IRS how much income you made from one company.

WHAT DO I DO IF THE AMOUNT ON THE 1099 MISC FORM IS INCORRECT?

In such case, you should contact the business who issued the 1099 to resolve the discrepancy. If they made a mistake, they must issue a corrected 1099 to both you and the IRS. To be safe, you should wait until you receive the corrected 1099 before filing your tax return. You need to be sure that the 1099 income amount agrees with your Schedule C income amount. If there is a difference between the total income on your 1099 misc form and the amount of income on your Schedule C, the IRS will eventually catch it and send you a letter demanding an explanation

I FILED MY TAX RETURN BUT AM YET TO RECEIVE MY 1099 MISC FORM?

There is no problem if you filed your tax return and received 1099 misc form after that as long as you reported your income on schedule C. But in, case you did not report your 1099 income, make sure you file an amended tax return. This will surely increase the amount of tax due and probably late payment penalties if you fail to pay your tax dues on time.

WHAT ARE THE PENALTIES FOR 1099 MISC FORM FILING?

The amount of the penalty is based on when you file the correct information return. The penalty is:

1) $30 per information return if you correctly file within 30 days (by March 30 if the due date is February 28); maximum penalty $250,000 per year ($75,000 for small businesses, defined below).

2) $60 per information return 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).

3) $100 per information return if you file after August 1 or you do not file required information returns; maximum penalty $1,500,000 per year ($500,000 for small businesses).

BY WHEN AM I SUPPOSED TO FILE AND REPORT 1099 MISC WITH THE IRS?

31st January 2013 – send misc 1099 form to the recipient

28th February 2013 – file form 1099 misc with IRS on paper

1st April 2013 – File form 1099 misc with IRS electronically

IF I WANT TO EFILE MY 1099 MISC FORM, HOW DO I SELECT THE SERVICE PROVIDER?

There are many service providers wanting to attract customers to file 1099s on their websites but there are certain requisites to look out for when filing form 1099 misc or any other 1099 forms. Below is the list provided:

1. Efile service provider should be IRS approved -look for IRS logo on the site
2. They should be safe and secure - look for security certificate on their website
3. offer user friendly navigation process to simplify your 1099 filing
4. offer reasonable and cost effective pricing. 
5. have customer support service - phone, email, etc. 

Now, we would recommend 1099online.com, as an efile service provider whom you should opt for to file your 1099 forms online. Not because we are 1099online.com, but because 1099online.com fulfills all the above and many more requisites that you should look out for when opting a 1099 filing service provider. Visit 1099online.com and find out yourself. 1099online.com supports efile for 12 different 1099s

This is a copyrighted© article written by ‘tax master’ 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

1099 dead line - 1099 filing

The IRS deadline to electronically file your 1099 form is March 31, 2013. As Per IRS regulations any person 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 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