Skip to content

1099-Misc

Dear Client,

Forms 1099-MISC must be provided to the recipients by January 31, 2019, and they must also be FILED with the IRS by January 31. So, it is imperative that you start planning now.

Please review your tax data for the year to date and accumulate what you can now so when January gets here, you’ll be ready!

Should you need assistance or explanation regarding any of this, please do not hesitate to contact us.

******************************************************************************

As your trusted Tax Preparer, we have prepared answers to frequently asked questions regarding 1099-Misc filing that should make it easier for you to become familiar with your responsibilities as a business owner or landlord.

It is now more important than ever to have your bookkeeping records complete, accurate, and available on time to us as your Tax Preparer.

******************************************************************************

We request all applicable information be submitted to us by January 20th, so we may file on time for you.

FAQ:

  • Who gets a 1099-Misc?
  • Anyone you have paid in the course of your trade or business (see below ##)
  •  more than $600 during the year for Services provided (see below**), and who is
  • not Incorporatedand
  • who you have paid by any method (including by trading goods/services) EXCEPT by credit card (the credit card company will report those payments).
  • Doctors you have paid more than $600 during the year, if paid through your business.
  •   does not include Insurance premiums.
  •  It does not matter if they are Incorporated or not, they still get a 1099-Misc.
  •  Lawyers you have paid more than $600 to during the year.
  •   It does not matter if they are Incorporated or not, they still get a 1099-Misc.

## Rental of Real Estate is considered a business.

  • **What is a Service?
  •    Examples include:
  •   Rental of real property or land.
  •   Royalty payments.
  •   Prize and award payments.
  •   Commissions.
  •   Directors Fees.
  •   Rental of equipment/tools.
  •   Medical and health care payments (does not include Insurance premiums).
  •   Insurance broker fees (does not include Insurance premiums).
  •   Landscaping.
  •   Architects, engineering, accountant and bookkeeping services.
  •   Contractors and repair-persons.
  •   Cleaning.
  •   Telephone answering services.
  •   Website design or graphic design (e.g. new Logo).
  •   Custom printing services (e.g. T-Shirts or Stationery).
  •   Consultants.
  • If I only purchased materials or supplies, do they get a 1099-Misc?
  •    No.
  • What if I have paid someone for their labor (service), and also paid/reimbursed them for supplies?
  •    You have 2 options:
  •   If you know the amount for labor, and the amount for reimbursement, you can issue a 1099-Misc for just the labor (service) portion.
  •   If you do not know the dollar amount for each, you can include the full amount paid. The recipient will include the items they purchased on your behalf as an expense on their personal tax return.
  • If the labor (service) portion is less than $600, do I need to issue a 1099-Misc.?
  •    No.
  • How do I know if they are Incorporated?
  •    The recipient should provide you with a completed and signed copy of Form W-9, indicating which type of Entity they are.
  •    If the name of the business has ",Inc.", or ",PC" in the business name, then they are likely incorporated.
  • What if they are an LLC?
  •    An LLC can be either incorporated or un-incorporated. On the W-9 they should indicate which type of LLC they are. Most LLC’s are unincorporated.
  • When should I get a W-9 from the person I paid?
  •    Before you paid them, or before you contracted with them. This is best practice.
  •    Now.
  •    Asap, but before January 15th (see #12 below).
  • What if the person I have paid will not provide a W-9 form?
  •    They can provide you with the same information that is requested on that form, but we strongly recommend you push for the W-9, and retain a copy on file.
  •    You may choose to withhold payment in full, until received.
  •    If you choose to continue paying this person, the IRS requires that you withhold "Backup Withholding", and remit this to them. This is currently 24% of the payment. We caution against this, as you can still receive penalties for not filing the 1099-Misc with correct information. The person refusing to provide the W-9 can also be subject to penalties.
  • What is the deadline for providing 1099-Misc’s to recipients (people I have paid)?
  • This date is unchanged at January 31st.
  • What is the deadline for filing 1099-Misc’s with the IRS/SSA?
  • For 1099-Misc’s that report Box 7 Non Employee Compensation (most common), the due date has been moved up 2 months to January 31st.
  • Most other 1099-Misc’s, the due date is unchanged at March 31st.
  • When should I start working on gathering information?
  • You should start now to make sure you have W-9 forms on file for any potential 1099-Misc recipients for the year.
  • What is the difference between W-9 and 1099-Misc.?
  • The completed W-9 is given to you BY the person you have paid, and includes the information you (and We) will need to prepare the 1099-Misc.
  • The 1099-Misc is provided by you TO the recipient (and to the IRS/SSA), to report how much you have paid them.
  • Do I need to provide W-9’s to Sickler, Torchia?
  • Yes, if possible (we will keep on file).
  • Alternatively, you can provide the same information that would be detailed on such a Form to us in writing.
  • What if I need to change an amount, or add a recipient after the filing deadline?
  • If the change is less than $100 (unless related to Backup Withholding) you only need to provide an amended copy of 1099-Misc to the Recipient. (Safe Harbor DeMinimis errors).
  • Other changes require Amended filings with the IRS/SSA as well as the recipient, and may be subject to Penalties.
  • If the recipient has already filed their personal tax return, they may need to file an Amended personal tax return.
  • Are there penalties for filing late?
  • Yes. These range from $50 per return, to $1.5million (per calendar year).

If you would like to discuss any of the above, please feel free to contact us.

Sincerely,

Sickler, Torchia, Allen & Churchill, CPA’s

Securities offered through 1st Global Capital Corp., Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the States of CT, FL, MA, ME, MN, NC, NH, NJ, NY, PA, SC, TX. This is not an offer to sell securities in any other state or jurisdiction. Links provided from this web-site are strictly for informational purposes and are not an endorsement or recommendation of the site, company, content, or its sponsoring organization by Sickler, Torchia, Allen & Churchill CPAs, PC or its affiliates. Sickler, Torchia, Allen & Churchill CPAs, PC provides these links as a convenience to you, and has not tested any software or verified any information found at such sites. Risks are associated with the use of software and the information available on the Internet and you acknowledge and understand these risks before using any of these services.