So what is a 1099-Misc form and when do you need to file one? A 1099-Misc form is a document the IRS refers to as “information returns”. The form reports the income that you receive that is not listed on a W2 form. Businesses must issue the forms to any payee (other than a corporation) who receives $600 or more during the year. The date these forms must be sent out by is Jan 31st for the prior year. Often if you do work as a freelancer or independent contractor you will receive these forms from companies that you have done work for and you must issue these forms to any independent contractor who you have paid $600 or more to.
There are penalties for late-filing of 1099’s and for failure to file. In fact, last January 1st Congress increased those penalties for failure to file or late filing. The penalties range from $30 to $100 for each 1099 return up to $1.5 million per calendar year for a large businesses and $500,000 for small businesses. IRS considers you to be a small business if you made $5 million or less in average annual revenues for the previous three tax years.
“We started to see penalties of up to $200 each last year,” said Liz Silva founder of Hamilton Bookkeeping. The new law now has a penalty for not providing a correct statement (intentional disregard) of $250 per 1099, with no maximum for the year.
If you need help with your bookkeeping and preparing your 1099 forms, Hamilton Bookkeeping is dedicated to providing accurate, full-charge bookkeeping for clients who wish to clean up their current bookkeeping problems, begin using QuickBooks, maintain accurate records, and adopt healthy bookkeeping procedures. Contact us today at (978) 468-1661.