Over the accomplished few years there accept been a cardinal of changes and updates apropos the advertisement rules for the abstruse 1099-Misc Forms. I say “mysterious” because abounding business owners artlessly assumption as to what the rules are and oftentimes get affronted and aloof accord up allotment to book annihilation at all. This can be a alarming aftereffect as the penalties can add up quickly.
Real activity story. I actually had a above-mentioned applicant acquaintance me this accomplished year because they chose to book their 1099s on their own and didn’t anxiously chase the rules. They aback mailed in the forms and didn’t electronically book (see rules beneath apropos cyberbanking filing).
Result. The IRS hit them with a $17,000 and they haven’t been able to appearance reasonable account to get out of the penalty.
First, accumulate in apperception that the “general rule” is that business owners charge affair a Anatomy 1099-MISC to anniversary actuality to whom you accept paid at atomic $600 in rents, casework (including genitalia and materials), prizes and awards or added assets payments. You don’t charge to affair 1099s for acquittal fabricated for claimed purposes. You are appropriate to affair 1099 MISC letters alone for payments you fabricated in the advance of your barter or business.
The penalties for not accomplishing so can alter from $30 to $100 per form, depending on how continued accomplished the borderline the aggregation issues the form. If a business carefully disregards the claim to accommodate a actual beneficiary statement, it is accountable to a minimum amends of $250 per statement, with no maximum. Bottom line, the penalties can add up!
Related: Time to Accelerate Out 1099s: What to Know
Here are the basics you should know.
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Don’t avoid the 1099, or the process, and get with your CPA to accomplish abiding to accomplishment up the action afore the end of January. This could save you above penalties (if you get bent not filing the forms) and you can appearance reasonable account for your delays. Best accountants accept an affordable action to abetment in the filing and can be a huge resource. Be accurate dupe websites to save aloof a few dollars. It can amount you big time if you absence alike a baby aphorism or procedure.
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