1099-MISC forms go to Independent contractors who have been paid at least $600 and do not do business as a corporation. They must receive this form by January 31, 2014.
You should have a signed form W4 showing their status, tax ID number and mailing address. If you don’t have it, you need to request it ASAP!
Check the Vendor setup in your QuickBooks or Sage 100 ERP 2013 (formerly MAS 90/200) software! These forms can be printed painlessly from your software, but you have to have it setup correctly from the beginning of the year for the totals to be correct!
If you were not provided with the contractor’s Taxpayer Identification Number (Tin), then backup withholding on their payments should have been made. Backup withholding should be reported to the IRS by January 31st, on Form 945.
You must file electronically through the IRS’ FIRE system if you file 250 or more 1099-MISC forms. File Form 4419 at least 45 days before the return’s due date to allow the IRS to respond and process applications.
TIN matching allows payers to verify that the TIN and contractor’s name match. The website www.tinyurl.com/irstins will allow you to verify up to 25 TINs at a time on screen.
The IRS is implementing on a permanent and voluntary basis a pilot project that allows filers to truncate the first five digits of a TIN. TTINs as they are now called look like this XXX-XX-1234 but cannot be include on the IRS’ copies. You may use them on payees’ paper copies or their electronic copies.
Consider providing recipients with 1099-MISC forms electronically, but they recipients must consent. Potential recipients include:
- Outside accountants, lawyers, and sales representatives
- Auto mechanics and auto repair stations that service company cars
- Plumbers, electricians, painters, carpenters, tech consultants, repair workers or janitorial services
- Equipment/office/company car lessors
When service providers have the words “Corporation,” “Corp.,” “Incorporated,” or “inc.” on letterhead, business cards or invoices, it means they are a corporation and a 1099-MISC is not necessary. Sole proprietorships, partnerships and attorneys who do business as corporations need the 1099-MISC form. Sending out more forms than necessary is better than receiving penalties for sending out fewer.
As always, if you need help with the software setup or generating these required tax forms, contact us at 760-722-6839 to schedule an appointment.