1099 Filing Deadline
Hey folks! It’s that time of year again…
Do I need to send 1099s?
Whether you are a Sole Prop or Single Member LLC (individual), General or LLC partnership (multiple owners), S-Corp or C-Corp, if you hired independent contractors (no taxes deducted from the checks or cash you gave them) and paid them $600 or more over the course of the year, you have one week left to send and file their 1099s. This includes the handyperson you hired to fix the sink, the DJ you paid to spin at your art opening or the web developer you enlisted to build your awesome new website. Yep, remember, as far as the government is concerned, there is no such thing as “under the table.” If you paid any individual $600 or more to perform a service for you, you need to report those payments and so do they.
How do I send them?
You can email these forms or dispatch them via snail mail. If emailing or transmitting electronically, you have until 11:59pm on January 31 to press “Send”. For snail mail, the forms must be postmarked January 31, 2018.
Ok, how do I prepare them?
As far as preparing goes, you can purchase forms at any office supply store like Staples or Office Depot. If you have accounting software on which you keep your books, you can print them and mail or email, or you can fill them out by hand. Remember, we said “Send and File.” Not only do you need to send the forms to the people you paid, you also need to transmit copies of those forms with the IRS. At this late date, the fastest, cheapest and easiest ways to do this is to use an online service like Efilemyforms.com or Intuit’s 1099 E-file Service, which for a nominal fee will email or mail your 1099s to your contractors (your choice) as well as file the appropriate copies with Uncle Sam. And the nominal fee is a deductible business expense on next year’s tax return.
What happens if I’m late, or don’t send them at all?
If you miss the deadline, but manage to send them out within 30 days of the due date, the IRS may assess a penalty of $30 per form capped at $75,000 for small businesses and $250,000 for larger companies. Past 30 days late, the penalties essentially double and ratchet up from there.
The take away?
Avoid the penalties, file within the next week, deduct the cost to do so on your tax return and keep it movin’.
The Tax Nerds