AVOID 1099 PENALTIES

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AVOID POTENTIAL FOR PENALTIES. LATE 1099 FILING PENALTY IS NOT WORTH THE RISK

Specifically, not providing a correct statement (intentional disregard) carries a penalty of $250 per 1099, with no maximum for the year. $50 penalty per 1099, if you file within 30 days of due date. $100 per 1099, if you file more than 30 days after the due date. $260 per 1099, if you file after August 1
Filing 2017 year end reports have a January 31st 2018 deadline. Submit information to us at least by January 15th to ensure timely filing.

The Freeman & Associates Accounting team can assist you in preparing and filing the Form 1099 to your vendors and to the government. Provided below is the description of the various types of Form 1099 and the information we will need from you.

 

Business use Subcontractor / Outside Service (Gardeners, Janitorial, Computer Technician, Doctors)

Businesses must report payments to independent contractors.  Typically, you need to supply a 1099 to independent contractors, firms that are not on your regular payroll, or any other company or worker that you paid $600 or more for services that is not on your payroll.

 

Attorney

The term “attorney” includes a law firm or other provider of legal services. Attorneys’ fees of $600 or more paid in the course of your trade or business are reportable.

 

Rent paid for Business purpose

Enter amounts of $600 or more for all types of rents, such as any of the following.

  • Real estate rentals paid for office space. However, you do not have to report these payments on Form 1099-MISC if you paid them to a real estate agent or property manager. But the real estate agent or property manager must use Form 1099-MISC to report the rent paid over to the property owner.
  • Machine rentals (for example, renting a bulldozer to level your parking lot). If the machine rental is part of a contract that includes both the use of the machine and the operator, prorate the rental between the rent of the machine and the operator’s charge .
  • Pasture rentals (for example, farmers paying for the use of grazing land).

 

To Prepare Your 1099

Provide your vendor with a Form W9 (https://www.irs.gov/pub/irs-pdf/fw9.pdf) to give us the following information:

  • Name of the individual or entity you paid              • Their tax identification number (SSN or EIN)
  • Their address                           •  The total amount paid to them in 2017                          • Any Tax Withheld

 

Freeman & Associates needs to receive Form 1099 Information at least by January 15th 2018 to ensure preparation before the IRS filing deadline.

 

Sincerely,

Steve Freeman, CPA and the Freeman & Associates Tax and Accounting Team

Steven Z. Freeman, CPA and the staff at Freeman and Associates provide Business Services, Tax Planning, Entity Formation,  and Accounting and can assist you with these services. If you have any questions on this matter, or to schedule an initial consultation, Please call us at (805) 495-4211.

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