1099 Deadlines, Penalties & State Filing Requirements for 2018

Posted on by Elite Financial Management

As the end of January approaches, it is important for all the employers to prepare and issue 1099’s to the recipients, and file them with the IRS without any delay.

1099 tax form, referred to as “Information Returns,” should be sent to independent contractors if you paid more than $600 to them in 2017. Since there are many types of 1099 forms, the common forms are 1099-MISC, 1099-INT, 1099-S, 1099-C, 1099 B, 1099-R and 1099-DIV.

It’s important for the employers to prepare and file the appropriate 1099’s to the IRS before deadline otherwise heavy penalties for late submissions or wrong information will be imposed. The following table will help you to remember all the dates for sending tax forms to the contractors and for paper filing or e-filing them with the IRS.

 

1099 Deadlines for 2018

Penalties for Late Filing

The penalties range from $50-$530 per missed 1099 tax form, depending on how late the forms were submitted.

 

The maximum penalty is a total of $1,064,000* for small businesses. In all cases, the IRS considers you to be a small business if you’ve earned an average of $5 million or less in annual revenue for the past three tax years.

 

 

New State Filing Requirements

Combined State/Federal Program for 1099-series

Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, South Carolina, Vermont, Virginia, Wisconsin.

States with no 1099-MISC filing requirement:

Alaska, Florida, Illinois, Nevada, New Hampshire, North Carolina, New York, South Dakota, Tennessee, Texas, Washington, Wyoming

States that require 1099-MISC filing, if you withheld:

Kentucky, Rhode Island, Utah, West Virginia

States that require a separate 1099-MISC filing or are unclear on their filing requirements:

Iowa, Massachusetts, Oklahoma, Oregon, Pennsylvania, Washington DC

We hope you will be feeling prepared, informed, and ready to file your 1099’s. If you would like a professional to do them for your then our 1099’s Made Easy package is ideal for you. Book your consultation below:

If you have any questions about the 1099 filing, you can reach us at any time. We’d be happy to help you out.

 

Juanita is the owner of Elite Financial Management, an Atlanta, GA based accounting firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Juanita loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found reading, cooking, and hanging out with her family.

 

Getting 1099’s Out the Door!

Posted on by Elite Financial Management

 

It’s January!

One of the most important financial tasks that you need to accomplish during this month is completing and dispersing 1099 returns for your team, contractors, and company vendors.  This can be a source of great stress for many business owners, due to tight deadlines and the fear of the large penalties for completing them incorrectly.

Don’t worry I have a 3 step process you can walk through to take care of them right now.

(Want us to handle it for you? – just book a call and we’ll take care of it!)

 

 

STEP 1: PREPARATION

You will need to have a list of everyone that you paid throughout the year so that you can review it during this exercise.  The easiest way to pull this report is from QuickBooks (assuming you have your records all updated in there).  You can use the Expenses by Vendor Summary report (but you will want to double check this, because if you made an error and paid someone as a ‘customer’ then they won’t show up on this report.

You can also run a Profit & Loss report and click into each account to see who the vendors are that have payments posted to them and make a manual list.

STEP 2:  IDENTIFY WHO

Here’s an easy way to determine who will need one, with these quick questions:

  1. Did you pay them for services? You only need to issue a 1099 to those vendors who provide you with services.  For example, your graphic designer, business coach, virtual assistant, etc.
  1. Did you pay them via check? You only need to issue a 1099 for payments made via check, wire, or electronic payment from your bank account.
  1. Did you pay them more than $600? This is pretty self-explanatory.  Only amounts more than $600 have to be reported on 1099 returns.  If you paid someone partially via checks and partially with credit cards, only total the amount paid via check.
  1. Are they an LLC or Sole Proprietor, Estate or Partnership?

To answer this question, you will need to look at their W-9 form, specifically box 3.  If they have checked the first box “Individual/Sole Proprietor or Single Member LLC”, the 4th box for partnership, or the 5th box for estate then you will need to issue them a 1099. If you don’t have a W9 on file for them, request it from them ASAP!  Use this link to download and send to them.

The exception to this rule is your attorney. You are required to report anything over $600 paid to your attorney on a form 1099 even if they are a corporation.

STEP 3:  HOW TO FILE

Now that you know WHO you need to issue your 1099 returns to, you can use your bookkeeping software or an online software like Track1099.com to actually issue them.

WHEN ARE THEY DUE

1099’s are due to both the recipient and the IRS by January 31st.

It’s easy to take care of your 1099 returns by following the simple steps laid out for you above.  However, if you want to let our professional team handle it, our 1099s Filing package is perfect for you.  We will review your bookkeeping records for you, determine who needs to receive your 1099 returns and take care of all of the filings for you.  It’s just $297, plus $5 per form filed.   (Prices increase to $497 + $5/form after January 20th)

(If you want us to just take care of this for you, book a call with me today to chat about it…)

 

 

 

 

Juanita is the owner of Elite Financial Management, an Atlanta, GA based accounting firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Juanita loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found reading, cooking, and hanging out with her family.