Common Mistakes Made on Form 1099s

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Common Mistakes Made on Form 1099s

January 29, 2019

The IRS Form 1099 is an important form that needs to be filed by businesses by January 31^st, 2019.

The list below are common mistakes and a few tips on how to avoid them:

Misunderstanding Form 1099

There are different 1099s and each has a specific tax ruling. For instance, when you pay $600.00 or more on rents and contract services you, you may have to file a 1099-MISC form. However, if it’s a law firm, you must issue 1099-Misc regardless of the amount you paid.

Please refer to the IRS instruction that discusses in details the businesses that are required to issue 1099-MISC.

Not Maintaining an Up to Date Financial Records

To complete the 1099-MISC, you need to have an updated record of total payments you made to your non-employees and other subcontractors for the year. Considering the tight deadline of issuing 1099-Misc by the 31^st of January, it is best practice to have good recordkeeping and up to date financial records each month.

Failing to Submit at The Correct Format

Employers can submit the completed 1099-MISC along with the Transmittal Form 1096 to the IRS by mail or through online filing. If you are unsure, check with your Enrolled Agent for the appropriate method to submit your 1099s.

Forgetting the Deadlines

The 1099s should be mailed to the IRS on January 31, 2019 to avoid late penalties.

Plan your tax strategy and make one step ahead. However, if you are having a hard time preparing your 1099s, consider consulting with your Enrolled Agent. If you need help in your 1099-Misc reporting, contact us today at admin@fas-accountingsolutions.com or 832-437-0385.