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

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.

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 2013 and it also has to be reported to the IRS by April 1st 2013, if you are filing electronically.

Form 1099 K – FORM 1099-K which is used to report payment card and third party network transactions. 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 1st 2013.

 The filing season for 1099forms starts January 1^st 2013. Businesses have to ensure that they provide the correct and required 1099 forms to the contractors/payee by January 31^st 2013. Businesses also have to efile 1099 forms with the IRS compulsorily. The filiing deadline for paper filers is Feb 28^th 2013 and for electronic filers is April 1st 2013.







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How to get your 2012 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 approved 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.

 

 

Form 1099-K Payment Card and Third Party Network Transactions

Starting in January 2013, 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 2012. 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.

1099 form filing due date 2011-2012 –You have less than 2 weeks to file 1099 forms with IRS.

Due date to mail 1099 forms to recipients has already passed. It was January 31st 2012. However, businesses and individuals still have time to file 1099 forms with IRS.

1099 forms are used to report various types of incomes other than wages, salaries and tips. Such incomes are reported for employees and form W2 is used for that purpose. 1099 forms are typically issued for those individuals who are not hired by the company as employees but are freelancers/independent contractors’ hired by companies on contractual basis. As an independent contractor if an individual earns $600 and above, then he must receive 1099 form from the business than contracted with him.

There are various types of IRS 1099 forms. The letter that appears after the 1099 denotes the type of 1099 form. Following are the various 1099 forms:

• 1099-A: acquisition or Abandonment of Secured Property
• 1099-B: Proceeds from Broker and Barter Exchange Transactions
• 1099-C: Cancellation of Debt
• 1099-CAP: Changes in Corporate Control and Capital Structure
• 1099-DIV: Dividends and Distributions
• 1099-G: Government Payments
• 1099-H: Health Insurance Advance Payments
• 1099-INT: Interest Income
• 1099-K: Merchant Card and Third Party Network Payments
• 1099-LTC: Long Term Care Benefits
• 1099-MISC: Miscellaneous Income
• 1099-OID: Original Issue Discount
• 1099-PATR: Taxable Distributions Received From Cooperatives
• 1099-Q: Payment from Qualified Education Programs
• 1099-R: Distributions from Pensions, Annuities, Retirement Plans, IRAs, or Insurance Contracts
• 1099-S: Proceeds from Real Estate Transactions
• 1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
• 1042-S: Foreign Person’s U.S. Source Income
• SSA-1099: Social Security Benefit Statement
• SSA-1042S: Social Security Benefit Statement to Nonresident Aliens
• RRB-1099: Payments by the Railroad Retirement Board
• RRB-1099R: Pension and Annuity Income by the Railroad Retirement Board
• RRB-1042S: Payments by the Railroad Retirement Board to Nonresident Aliens
• W-2G: Certain Gambling Winnings

Business owners not only mail 1099 forms to recipients but also file a copy of the form with IRS. They also retain a copy of it with themselves. Hence as a recipient or independent contractor, if you think that you can escape from filing your 1099 income, then you are wrong. IRS will already have a copy of it and to safeguard against penalties, it is best you file your 1099 income as tax return using form 1040.

Every independent contractor receiving 1099 form must file for taxes in order to prevent penalties.

Now, there are 2 ways to file 1099 forms. One is to follow the old paper filing method and the other is to use the advanced and more secure method of efiling.

Due date to file 1099 form with IRS if you are paper filing is 28 Feb 2012. But if you are electronically filing 1099 form, then you get 1 month extra time which makes your due date for 1099 form filing 2nd April 2012.

Efiling is much easier and convenient and not to forget more secure and cost effective. Nowadays there are many IRS approved and authorized efile service providers such as 1099online.com offering 1099 form efile services.

So now it’s your choice weather you want to rush to file 1099 forms with IRS using the paper filing method or to file 1099 forms with IRS in just few minutes using the 1099 online form filing method.

IRS update – New 1099-k form rules that apply to transportation companies and cab drivers

IRC Section 6050W was added to the Internal Revenue Code as part of the Housing & Economic Recovery Act of 2008. Its purpose is to improve voluntary tax compliance by businesses that accept payment via purchase cards.

According to IRC section 6050W, payment settlement entities (banks and third party payment network processors) are required to issue form 1099-k (merchant cards and third party network payments) to participating merchants reporting all payment card transactions that were processed in prior tax year which in the current scenario is year 2011.  According to the rules and regulations, any transaction that has happened using debit card, credit card or transactions settled through third party payment networks like Pay pal, E-bay must be reported using form 1099-k.

1099k form reporting and regulations apply to every organization and industry that uses electronic payment transactions through payment cards or third party settlement organizations for their business.

1099-k form for transport industry and Cab drivers

1099-k form has impacted every business big and small including the vast transport industry.  Transportation industry including fleet owners and independent cab drivers are required to file form 1099-k. Non compliance with the new rules and regulations by the transport industry could result in hefty penalties.

According to Section 6050W, IRS requires banks or entities such as third party settlement organizations to provide 1099-k form to transport companies that accept credit card as a form of payment for tax year 2011. Transport companies can expect to receive the 1099k form from its bank early 2012. The 1099-k form will report the total gross receipts for the company from credit card transactions processed in year 2011.

On the other hand, besides receiving form 1099-k from the bank or other third party settlement organization, transport companies under ‘aggregate payee rule’ are supposed to issue and file a 1099-k form for each driver that it hires on an independent contract basis. In other words, if a transportation company receives the proceeds of credit card transactions from its bank (or other entity that settles electronic payment transactions), on behalf of its independent contractor drivers who accept credit card payments, and that transportation company then distributes the proceeds to the driver, then in such case the transportation company must issue a Form 1099-K to each driver reporting the gross proceeds from credit card payments.

Hence, under this rule the transportation company will not only receive a Form 1099-K from its bank (or card processor), but it will also have to file a Form 1099-K for each independent contractor driver to whom it has paid or credited amounts on account of fares and tips paid by credit card, reporting the gross amount paid to the independent contractor driver.

Thus if you are an owner of a transport company and have hired 15 independent cab drivers who accept credit cards payment  from passengers and the transactions are processed through your company, then it is your duty to provide each driver a 1099-k form.

There are no 1099-k form filing exceptions for Cab drivers

Many people are asking if there are any exceptions to 1099-k form filing. However till now for payment card processing companies there are no exceptions. A single credit card transaction is enough to trigger the filing of 1099-k form. But, there is a de minims rule for third party settlement organizations which says that third party settle network must have minimum of $20,000 annual gross payment or minimum 200 transactions. However this rule does not apply for credit card transactions or to the "aggregate payee" requirement that a transportation company issue Forms 1099-K to drivers who have accepted credit card transactions.

1099-k form reporting requirement for transport industry and cab drivers

There are certain questions being asked by transport companies such as ‘being an owner of a transport company am I required to file 1099-k form for fares paid to driver using company voucher?’ or ‘Do I have to file form 1099-k or receive form 1099-k from banks if I have drivers as employees?’ The answer to both these questions is NO. Fares paid by credit card are legible to be filed using form 1099-k but not fares paid using company voucher. If your company has hired cab drivers as employees and you pay them monthly salary, then the company will receive form 1099-k from its bank that process credit card transactions but is not required to issue a 1099-k form to its employee drivers.

Certain transactions that trigger the filing of IRS 1099-k form are: lease payments paid by drivers using personal credit card, if a business pays its monthly invoice using credit card and if a customer purchases prepaid cab fare card using a credit card.

However, there are certain transactions that do not require form 1099-k to be filed by a transport company. These transactions include:

• Issuing a credit card to a driver as an alternate form of payment
• Using a debit card to withdraw cash from ATM
• Cash advances on credit card

A transport company before filing form 1099-k should ensure that they have all the information necessary to file 1099-k form. It’s best that the company gets form W9 filled by the driver so that they can have the driver’s tax identification number (EIN, SSN), legal name and address on an official form.

In Order to avoid tax withholding and other possible penalties it is advisable that it is important that companies keep accurate records reflecting the amount of credit card fares submitted by each driver in order to prepare and file an accurate Form 1099-K. Form 1099-k must be filed with IRS by Feb 28^th 2012 for paper filers and by April 2^nd if opting to efile 1099k

IRS update: Considering that this is the first year when form 1099-k will be used by businesses all over, hence IRS is granting penalty relief for inaccurate data submitted on form 1099-k provided that the payer has made a good faith effort to report the correct information, and has actually filed Forms 1099-K in a timely manner and provided a copy to the payee.

The regulations under section 3406 require that backup withholding apply to section 6050W payments made after December 31, 2011, if a payee has not furnished a correct taxpayer identification number (TIN) for form 1099-k. However the backup withholding rule has been postponed and will apply only after December 31^st 2012.