1099 Guidelines

Hey there, business owner! Ready to send out your 1099’s?

We didn’t think so…

To help you out, here at C3Workplace, we’ve prepared some guidelines for you as to what you need to prepare 1099s (it’s not just subcontractors any more!).

What is a 1099 misc?  Typically, a 1099 misc is for a supplier that is not a corporation.  The best practice for designating a 1099 vendor is to have all suppliers fill out and submit a Form W-9,Request for Taxpayer Identification Number and Certification, prior to paying them.  You can then determine whether they should receive a 1099

Who gets a 1099 misc?   The following is a list of characteristics that determine a supplier as a 1099 vendor (this is a partial list):]

  • Professional service fees –   Examples are Accountant, training & development, attorney
  • Commissions paid to non-employees
  • Fees paid to independent contractors.  Click here for an informative post by Balance Point Consulting:  Independent Contractors – Easy as ABC?
  • Taxable fringe benefits for non-employees
  • Director’s fees
  • Our rule of thumb, when in doubt, get a W9 and send the 1099

Step 1:  Compile 1099/vendor list:    Review your vendor list in QB.   Some may already be designated as 1099 vendors.  Some are not.   If you are not sure and/or don’t have complete information for that vendor,  you will need to get a W9 Form from them.

This is also a good time to update your vendor list – making vendors inactive speeds up the process for the following year.

Step 2:  Decide who will prepare

If you would like our help in preparing 1099s, give us a call by December 15th to get the process started.   If you are having someone else create your 1099s, touch base with them to make sure you are working within their timeline.

Step 3:  Be mindful of the tax timeline (Courtesy of Alex Krasnomowitz, CPA)

January 31, 2017

o   Copy A Form W-2 , Wage and Tax Statement, with Form W-3, Transmittal of Wage and Tax Statement, paper or electronically filed are due January 31st.  In prior years the employer could file with SSA on February 28th, that has been changed.

o   Form 1099 Copy A, Miscellaneous Income, with Form 1096, Annual Summary and Transmittal of US Information Returns,  paper or electronically filed are due the January 31st.  In prior years the employer could file with the IRS on February 28th, that has been changed

March 15, 2017

o   New for 2016 filing season. Form 1065 “US Partnership Return” are due March 15th.

o   Form 1120 S “Subchapter S Corporation” returns.  Same as last year.

April 17, 2017

o   New for 2016 filing season Form 1120 “C Corporation” are due April 17th.

o   Form 1040 “US Individual Income Tax Return”

  • $10 and over in royalties
  • $600 and over included, but not limited to: rents, services, prizes and awards, cash payments for fish or other aquatic life you purchase from anyone engaged in the trade or business of catching fish
  • Gross Proceeds of $600 or more paid to an attorney (different from attorney fees)
  • Where to file government copy
    • IRS – (business office in NJ,NY,CT)
      • Department of the Treasury
      • IRS
      • Austin, TX 73301
    • NJ – with Copy C
      • State of NJ Division of Taxation
      • Revenue Processing Center
      • Gross Income Tax
      • PO Box 248
      • Trenton, NJ 08646-0248
    • NY- no need to send, they obtain info from IRS.
    • CT – Department of Revenue Services
      • State of Connecticut
      • PO Box 5081
      • Hartford, CT 06102-5081
    • PA – PA Department of Revenue
      • PO Box 280412
      • Harrisburg, PA 17128-0142
  • Penalties – if returns are not filed, or even filed late, or filed incorrectly, you may be assessed penalties if you cannot show reasonable cause. Very important to have signed W9 on hand. ($50 minimum per late information return [i.e. payee])
  • Generally payments to corporations are not reportable. HOWEVER, there are exceptions (for example payments of attorney fees)
  • Filing Corrected Returns on Paper
    • Two different ways depending on the type of error
  • Business Tax Returns – part of the preparation is an answer to the question, Did you file 1099s if required…?

YIKES, a bit daunting!

panic

DON’T PANIC

We can help

Call us today or email us.  We are happy to provide guidance, support and the actual filing of your 1099s this year.

Hurry you’ll probably have prep work to do as well!