Why do I have to issue a 1099-MISC? And to whom?
Are you aware of form 1099-MISC? No? It’s not unusual for business owners to be surprised that they need to issue form 1099-MISC. Why, to whom, and when? Any penalties? We can help you with all your questions. Here is some basic information to help you better understand the mysterious form 1099-MISC.
As a general rule, you are required to file form 1099-MISC for each person (other than corporations) to whom you paid at least $600 in rent or services during 2014. You don’t need to issue 1099s for payments made for personal purposes.
Let’s say you need to issue form 1099-MISC to Bob since you know you paid him $800 for office cleaning service in 2014. What’s next? Do you have Bob’s taxpayer ID number? One of the best practices we advise our clients is to obtain a W-9 form from any vendor before you pay them. Remember, form W-9 is your “best buddy,” keep it in your files.
When do I file? Furnish Copy B of form 1099-MISC to the recipients by February 2, 2015. Then file Copy A of this form with the IRS by March 2, 2015.
Have no time? Too busy or overwhelmed? Thinking of not filing this year? STOP! This can be very dangerous as penalties can add up quickly. We can help! Don’t lose any sleep, just give us a call at Klein Hall CPAs.