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Home / Business Taxes / 2011 Business Reporting Requirements for 1099-MISC

2011 Business Reporting Requirements for 1099-MISC

January 10, 2012 By Manny Davis

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If you are a small business owner who pays independent contractors, service providers and other individuals for freelance or contract work, you are required to issue IRS Form 1099. These forms are sent to any individuals who you’ve made payments to in order to be used in their own tax filing.

The information on Form 1099 is also reported to the IRS so that the information can be matched to the individual’s tax return and ensure that the income is being reported properly.

If you don’t issue 1099s, you will pay noncompliance penalties to the IRS.

Who Needs a 1099-MISC Form?

While there is more than one type of 1099 form – since it is used for a wide variety of transaction reporting – small business owners generally use the 1099-MISC form to report payments made to non-employees doing work for them.

The guidelines for who must receive a 1099-MISC form are as follows:

  • payments in excess of $600 or more in a year made to contract workers, consultants, freelancers, health and medical providers
  • payments to attorneys of any dollar amount
  • payments to fishing boat crew members in any dollar amount
  • payments made to individuals who are subject to backup withholding rules
  • royalty payments, substitute dividends, tax-exempt interest payments of $10 or more in a year
  • sales greater than $5,000 in a year of consumer products sold for resale (direct sales consultants, for example)

When are 1099-MISC Forms Due?

If you are required to issue a Form 1099 to a contractor or other individual, you must send it on or before January 31st of the year following the tax year in which you paid the individual; and you must report the information to the IRS by February 28th. Also file Form 1096 with the IRS to summarize all 1099-MISC forms.
Some states require copies of 1099 forms, so check with your state to see what the requirements are and the due dates.

What Happens if You File 1099-MISC Forms Beyond the Due Dates?

Filing 1099-MISC forms beyond the due date generates steep IRS fines, so be sure to get them in on time.

If you file the 1099-MISC up to 30 days beyond the return due date, you’ll pay $15 per 1099 with a maximum fine of $25,000 per business.

If you file between April 1st and August 1st of the year in which the 1099 was due, you will pay $30 per 1099, up to a maximum fine of $50,000.

If you file or make corrections after August 1st, the fine is $50 per 1099 and a maximum fine of $100,000.

Reader Interactions

Comments

  1. Samuel says

    January 11, 2012 at 6:36 am

    Great article…thanks for the read

    Log in to Reply
  2. Brooke says

    February 1, 2012 at 10:14 am

    What if a contractor will not respond with tax id number or address? He has disappeared.

    Log in to Reply
  3. NJ Tax Refund says

    March 19, 2012 at 4:30 am

    Thank you to sharing this types of such very useful information about tax filing preparation. I thought there was a catch in this plan someplace, just couldn’t figure it out. 95% of the people making under 200 grand would pay more in taxes I found that this types of information is very useful during the tax filing via online and when we are filing our taxes thanks once again

    Log in to Reply
  4. Johnson Kirsten says

    April 3, 2014 at 5:20 am

    This is a healthy exchange of thoughts.
    I just want to share a PDF filling out tool I’ve discovered, just in case you need it.
    PDFfiller.com allowed me to upload word and powerpoint document to be converted to PDF. You can also look for 1099 Misc form and many different forms from
    It let me fill out forms neatly and after I had the capability of either to save, print, fax , share or SendtoSign the forms.
    Such a great experience!

    Log in to Reply

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