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Avoid IRS Penalties With Form 1099 Tips From American Payroll Association
Wednesday, January 29, 2020
SAN ANTONIO, Jan. 24, 2020 /PRNewswire/ -- Any business that hired an independent contractor in 2019 has until January 31 to submit the correct tax forms to the IRS or face penalties. The American Payroll Association, the nation's leader in payroll and accounts payable education, offers five 1099-MISC preparation tips for businesses to ensure accurate tax reporting for 2019.
1. All Non-Corporate Service Providers Must Receive Form 1099-MISC. Every service provider you paid at least $600 for services during 2019 must receive a Form 1099-MISC by January 31, 2020. If the service provider is a corporation, you generally do not have to provide Form 1099-MISC.*
*Owners must provide Form 1099-MISC to sole proprietorships, partnerships, and attorneys or medical service providers who do business as corporations. Determine if a service provider is considered a corporation by having them complete IRS Form W-9, Request for Taxpayer Identification Number and Certification.
2. Better Safe Than Sorry. If you are unsure if Form 1099-MISC is necessary, send one anyway to the service provider. Otherwise, you set your business up for possible penalties.
3. Don't Be Confused by the W-2. Although both the Form W-2 and Form 1099-MISC are considered information returns, the forms serve very different functions. The purpose of Form 1099-MISC is to report payments made through a trade or business to a person who's not an employee, or to an unincorporated business.
4. Make Your Credit Card Work for You. If you paid contractor services with a credit card, debit card, or gift card, then it is not necessary to file Form 1099-MISC. The bank or credit card company will take care of it by sending the contractor Form 1099-K.
5. Deadlines Matter. You have until January 31, 2020, to send Form 1099 to service providers by mail. If Form 1099-MISC includes an amount in Box 7, Nonemployee compensation, you have until January 31, 2020, to send paper or electronic copies to the IRS. If Box 7 is left unchecked, the last day to submit paper copies to the IRS is February 28, 2020 (March 31, 2020, if filing electronically).
For additional tips and resources, visit www.americanpayroll.org. The American Payroll Association is the nation's leader in payroll and accounts payable education, publications, and training.
View original content:http://www.prnewswire.com/news-releases/avoid-irs-penalties-with-form-1099-tips-from-american-payroll-association-300992859.html
SOURCE American Payroll Association
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