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.

IRS provides penalty relief for 2011 form 1099-k filers

IRS has announced transitional relief from penalties for a section 6050W filer reporting incorrect information on information returns (Form 1099-K) and payee statements filed under section 6050W of the Internal Revenue Code. The relief provided by this notice is available for information returns and payee statements to be filed only in 2012, based on payments made in calendar year 2011, provided that the section 6050W filer makes a good faith effort to accurately file the appropriate information return and the accompanying payee statement.

1099-k form background:

Under section 6050W, added by section 3091 of the Housing Assistance Tax Act of 2008, Div. C of Pub. L. No. 110-289, 122 Stat. 2653 (the Act), a payment settlement entity (“payor”) making payment to a participating payee (“payee”) in settlement of reportable payment transactions must make an information return for each calendar year to be filed with the Internal Revenue Service setting forth the gross amount of such reportable payment transactions, as well as the name, address, and taxpayer identification number (TIN) of the payee. A similar statement must be furnished to the payee setting forth the gross amount of such reportable payment transactions, as well as the name, address and phone number of the information contact of the person required to make such return.

Section 6050W applies to two types of transactions: (1) payment card transactions and (2) third party network transactions. All payments made in settlement of payment card transactions must be reported in the manner described above.

Payments made in settlement of third party network transactions need be reported only if gross payments to a payee exceed $20,000 and the number of such transactions exceeds 200 with respect to the participating payee. The information is to be reported to the IRS on Form 1099-K, Merchant Card and Third Party Network Payments.

Section 6721 imposes penalties on a person for, among other things, failing to include all required information or including incorrect information on an information return. Section 6722 imposes penalties on a person for, among other things, failing to include all required information or including incorrect information on a payee statement. Sections 6721 and 6722 are applicable to section 6050W payers that must file information returns for payments made in settlement of reportable payment transactions.

However, In order to provide additional time to develop appropriate procedures for compliance with these new reporting requirements, the IRS will not impose penalties under sections 6721 and 6722 on payers that must file information returns and payee statements provided that they make good-faith efforts in filing accurate IRS Forms 1099-K and furnishing the accompanying payee statements.

This notice does not apply to a payer who erroneously fails to file information return or payee statement. Additionally, the relief provided by this notice only applies to information returns and payee statements pertaining to reportable payments (form 1099k) made in calendar year 2011.

2011 form 1099-K report credit transaction

Starting 2012, any income that is received through credit and debit card transactions will have to be reported to the IRS by filing form 1099-K (Merchant Card and Third-Party Network Payments).

Financial institutions and merchant card service providers will have to report the annual gross payments which have been processed either through debit or credit card using form 1099-K to IRS and to the merchants. The 1099-K form format is unlikely to be similar to the 1099misc form which is used to report miscellaneous incomes earned by non employees/independent contractors/freelancers.

As the new development has already taken off considering that January 2012 has begun, it would be advisable that payment processors and business owners get ready, prepare the information they need and file form 1099-K and send a copy to the IRS and the recipients as early as possible.
Details of Credit Card and Merchant Payment Reporting

Banks and other payment settlement services will need to report gross annual receipts for each merchant. The income reporting will apply to "any transaction in which a payment card is accepted as payment". Thus, banks and other financial service providers will be reporting the total, gross amount of credit card and debit card payments for the year for each merchant.
Exception for De Minimis Payments

Reporting 1099-K form is not required if

• A merchant's total payment transactions for the year does not exceed $20,000, and 
• The total number of transactions does not exceed 200. 
• A withdrawal of funds at an automated teller machine (ATM) via payment card, or a cash advance or loan against the cardholder's account 
• A check issued in connection with a payment card that is accepted by a merchant or other payee. 
• Any transaction in which a payment card is accepted as payment by a merchant or other payee who is related to the issuer of the payment card.
  

How to prepare for credit card and third party payment reporting (FORM 1099-K)

Small businesses will want to review their bookkeeping and accounting practices. Once card payment reporting begins, business owners will need to reconcile the information reports submitted by the banks to their own books. Any discrepancies in reporting will need to be addressed so that accurate tax returns can be filed with the IRS.

One bookkeeping issue is clear; the new law requires banks to report gross receipts. However, merchants often have chargeback, issue refunds, or have debit card transactions where the customer receives cash back. Under the proposed regulations, banks and other payment transaction services will be reporting only gross monthly and annual payments. Fees, chargeback, refunds and other items will not be netted against these gross amounts for IRS reporting purposes. Accordingly, businesses should have thorough accounting procedures to keep track of these items separately. In other words, if you are accustomed to recording only a net deposit from a merchant account, it would be advisable to separate those net amounts into gross receipts and the associated fees and refunds. That way your internal financial reports can be more easily reconciled to the new Form 1099-K. 

Form 1099-K requires merchants to provide their full information

Since financial institutions will need to report credit and debit card receipts to the IRS, merchants will need to provide their payment processor with the full legal name of the business, their address, and taxpayer identification number. For most businesses, this will be their Employer Identification Number (EIN). As such, payment processors will likely request businesses to provide them with a Form W-9 to obtain this information. 

Possible Backup Withholding Issues

Merchants who fail to provide their taxpayer identification number could become subject to backup withholding at a rate of 28% on their payments. To prevent backup withholding, merchants should provide their card payment services provider with the name, address, and EIN for the business.

Another concern is that credit card transactions could become subject to backup withholding if a business commits fraud on their tax payments. Under the proposed regulations, the IRS made it clear that backup withholding would occur on gross card payments. This could leave a business in severe financial difficulties. Business owners who are struggling with tax debts should work with their tax professional to develop a repayment strategy that prevents any withholding on their card payments.

Tax form 1099 reporting requirements for year 2011-2012 have been repealed.

Earlier it was said that from 2011 onwards there would be huge changes in the reporting requirements for form 1099. However, fortunately two of those 1099 filing rules which would have created disturbance and chaos among business owners, brokers, agents and other intermediaries have been revoked by the congress.

On a brief background check, a 1099 form is an informational reporting form required to be filed with the IRS by business owners or any individual who hires the services of an independent contractor/freelancer and pays him at least $600 in remuneration for his services. The reason why Congress started informational return reporting was to reduce the tax gap that had risen out of no reporting of income earned by freelancers.

When the new legislation was passes for the new 1099 reporting requirement for year 2012, it was a great deal of concern for the business owners as the new 1099 requirements would have resulted in huge filing and administrative costs. The new 1099 filing regulation would have surely lead to thousands of additional and unnecessary 1099 form filing.

The new 1099 filing rule required that 1099 forms should be issued to all business owners both under service and property for $600 and above. Moreover, even corporations were no longer exempt from filing form 1099. Hence, business had to issue large number of 1099s and they had to obtain a TIN from the vendor in order to avoid the required backup withholding of federal income tax.

Another rule under the new legislation was to include rental property owners, which means that if you are a house owner and you rented your house and paid an individual around $1000 to paint your house, you would then have to issue form 1099. Property owners would have been required to file 1099s as early as 2011 and would have been required to comply with the all the other troublesome 2012 form 1099 changes

However, businesses need not worry about the new 1099 reporting regulations and the new rules have been repealed by the government. 1099 reporting remains the same as it was earlier. Businesses can continue filing 1099 forms without any hindrance and troubles.

Pointers on current 1099 rules

• Businesses should issue a Form 1099-MISC to appropriate vendors (non-corporate) to whom they paid more than $600 for services during a calendar year. The Form should be provided to the vendor by January 31st and should be mailed to the IRS (along with Form 1096) by February 28th 2012. If you are electronically filing form 1099, then last date to submit form to IRS is April 2nd 2012
  
• A non-corporate entity includes individual sole proprietorship, partnership or limited liability company (LLC). Additionally a Form 1099-MISC is required for services paid to attorneys regardless of their entity type.
  
• Examples of payments that might require a 1099-MISC would be rents, attorney fees, contract labor, director fees, commissions, royalties (when payments exceed $10) and any compensation not included on W-2.

A business should use form 1099-misc to report any payments they have made in the course of their business. A 1099 misc form is issued by businesses to individuals/ independent contractors to whom they have paid $600 and more. If you are unsure weather you are legible to file form 1099 misc or which 1099 form should you file, contact 1099online.com an IRS certified efile provider to efile your 1099 forms and answer your queries on 1099 form filing.

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.

 

 

 

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

Free registration or login with face book account

Entering the 1099 Data

Efile the form to IRS 

If you have questions please do call us or chat with us.

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.