3 Tips to Avoid IRS Penalties for Late or Not Filing of 1099-MISC

January 9, 2019

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What is Form 1099-MISC?

Form 1099-MISC is ‘Miscellaneous Income’. Employers issue the Form 1099-MISC to contract workers, independent contractors or other non-employees, to report payments made during the year.

This form must be provided to any ‘non-employee’ to whom an employer paid $600 or more during the calendar year.

Important Note: Do not confuse Form W-2 to Form 1099-MISC. W-2 is for employees while Form 1099-MISC is for non-employees.

 

  1. Complete the Form Accurately

1099-MISC Filing Tips

The issued 1099-MISC must include the following information:

 (1) total amount of payments for this individual or business; and

(2) individual’s taxpayer ID and address.

Employers will need to get a W-9 Form from each payee. W-9 Form is titled the “Request for Taxpayer Identification Number and Certification.” It records the tax ID numbers for workers who are not employees and it records the certification of the person completing the form attesting that: the taxpayer identification number is correct, the taxpayer is not subject to backup withholding, the individual is a U.S. citizen, and any Foreign Account Tax Compliance Act codes on the form are correct.

 

  1. Submit Completed 1099-MISC At the Correct Format

1099-MISC Filing Tips

Employers can submit the completed Form 1099-MISC along with the Transmittal Form 1096, a summary tax report which shows the totals from 1099 Forms, to the IRS by mail or online.

 

  1. Submit 1099-MISC by Due Date.

1099-MISC Filing Tips

For the 2018 tax year, the deadline for giving these forms to payees and the deadline for filing the forms is: January 31, 2019.

 

 

Common Mistakes

  • Filing Form 1099-MISC late or not filing

1099-MISC Filing Tips

Employers who submit the Form 1099-MISC late or not filing at all to the IRS are subject to penalties.

 

  • Missing TINs and Incorrect Name/TIN Combinations

1099-MISC Filing Tips

TINs can be an SSN, an Employer Identification Number (EIN), an Individual Taxpayer Identification Number (ITIN), or an Adoption Taxpayer Identification Number (ATIN).

If a TIN is not provided or is obviously incorrect, it is considered missing. A Name/TIN combination is incorrect if it does not match or cannot be found on IRS or SSA files.

 

IRC 6721, ‘Failure to File Correct Information Returns’, imposes a penalty per return for each of the following infractions related to information returns that are defined under IRC 6724(d)(1):

  • Failure to file,
  • Filed with a missing/incorrect TIN (or other missing or incorrect information),
  • Filed untimely,
  • Filed on paper when electronic filing was required (incorrect media),
  • Filed in an incorrect format, (unprocessable), or
  • Any combination of the above.

For more detailed information, please refer to IRS Publication 1586.

 

If you need more information about the requirements and procedures of accomplishing the 1099-MISC reporting, contact us today at admin@fas-accountingsolutions.com or 832-437-0385.

1099-MISC Filing Tips

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