1099 Deadline is Looming

Kirsch CPA Group

Jan 23, 2020

As the 1099 deadlines loom closer, one of the questions we are asked by entrepreneurs every year is whether or not they need to send out 1099’s to their contractors.

1099 tax form should be sent by your company to independent contractors if you paid more than $600 to them in the year 2019. But as with most tax rules, its more complicated because not all contractors need to receive a 1099. So who meets the standard to send 1099?

  • They were paid at least $600.
  • They are a US citizen.
  • They are an individual and not a corporation- If they are a registered business entity (partnership, S Corp, C Corp, etc) you do not need to send them 1099.
  • You paid them via cash or check and not a third-party source- If you paid them via a third-party source, meaning it didn’t come directly from your bank account to them, you do not need to issue 1099. The two big third-party sources are credit cards and PayPal.

Heavy penalties for late submissions or wrong information will be imposed so it is important for employers to prepare and file the appropriate 1099s to the IRS before the 1099 deadlines.

1099 Deadlines for 2019

Form 1099 Due Date to Recipients Filing to IRS By Mail E-Filing to IRS
1099-MISC (NEC Only) January 31, 2020 January 31, 2020 January 31, 2020
1099-MISC (Other Forms) January 31, 2020 February 28, 2020 March 31, 2020
1099-DIV January 31, 2020 February 28, 2020 March 31, 2020
1099-INT January 31, 2020 February 28, 2020 March 31, 2020
1099-R January 31, 2020 February 28, 2020 March 31, 2020

 

Penalties for Late Filing

The penalties range from $50-$550 per missed 1099 tax form, depending on how late the forms were submitted.

Penalty per Form Length of Delay
$50 More than 30 days late
$110 More than 30 days late but before August 1st, 2020
$270 Filing on or after August 1st, 2020
$550 Intentionally neglecting to file

There are many services that can help you file your 1099’s including QBO or if you don’t have the time or you are unsure of who needs a 1099, we can help. Give us a call at 513-858-6040.

Kirsch CPA Group

About The Author

Kirsch CPA Group provides accounting, tax and business consulting to small and medium enterprises.

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