Every trade or business must file information returns (Forms
1099) for each year that certain payments are made to non-corporate recipients.
One of the most common information returns for most small
businesses is Form 1099-MISC. You use Form 1099-MISC to report miscellaneous
payments to non-employees. This includes fees for services provided to your
business by independent contractors, such as consultants, cleaning people, and
others. Generally, you don't report fees paid to corporations, but there are
exceptions. Payments to lawyers, for example, must be reported whether the
lawyers are incorporated or not.
This month is the perfect time to start assembling what your
company will need to meet the reporting requirements for Form 1099: a list of
recipients, verification as to corporate/non-corporate status, and the recipient's
taxpayer information. Getting a head start now will eliminate a last-minute
scramble next month.
Failure to file returns or to include correct information
can result in a fine of up to $100 per information return to a maximum of
$500,000 for a small business.
Information returns are to be given to payees by February 2,
2015, and copies are to be mailed to the IRS by March 2, 2015. The IRS due date
is extended to March 31, 2015, for electronically filed returns.
If you need help determining your 1099 filing requirements
for this year, contact our office.
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