When do you need to file a 1099

1099 reporting: everything you need to know

When you run a business or own rental property, any payments you make "in the course of business" for services, rent, interest and non-employee compensation may be subject to 1099 reporting.

We say "in the course of business" because you don't have to send a 1099 to someone who painted your own home — unless you happen to be renting the house out, in which case you're a business. And businesses of all kinds have to grapple with 1099s.

You need to send the payee a copy of Form 1099 by January 31. You also have to file copies of certain 1099s with the IRS by that date, which is a big change from prior years.

Those "certain 1099s" refer to Form 1099-MISC, the kind of 1099 you're most likely to be issuing. And specifically, it's a 1099-MISC for non-employee compensation (box 7 on the form).

Every other kind of 1099 — including a 1099-MISC for anything that isn't non-employee compensation — has a government filing date of February 28, or March 31 if filed electronically.

Who gets a 1099, and who doesn't?

If you made total payments of $600 or more to any one business, you need to send them a 1099. But there are some broad exceptions:

You don't report payments for products.

You don't report payments by credit card, debit card or a qualified third-party payment network (e.g. PayPal, Itex, BNI). The responsibility for reporting those payments falls to other people.

You don't report payments to a corporation, which can often be identified by its name — AT&T Inc, Cablevision Systems Corporation — but not always, as an LLC could go either way (see Understanding Form W-9 below for the gory details). When in doubt, issue a 1099.

But but but — all attorneys' fees, direct barter transactions, and medical and health care payments have to be reported whether you're dealing with a corporation or not. They're the exceptions to the exception.

Once you've figured out who gets a 1099 and who doesn't, ask the lucky recipients for their Employer Identification Number (EIN), or Social Security Number if they don't have an EIN. You can ask them to fill out a Form W-9 for this purpose.

Every 1099 that you fail to prepare correctly and on time carries a penalty as high as $520, depending on how late you are. But it gets worse: "intentional disregard of filing requirements" increases those penalties to "at least" $1,060. Make of that what you will.

These are substantial increases — more than double! — over prior years. Ignore the 1099 thing at your own peril.

The IRS now includes the following two questions on all business returns, including Schedules C, E and F of Form 1040:

Did you make any payments in 2016 that would require you to file Form(s) 1099?

If "Yes," did you or will you file all required Forms 1099?

We can't file your return without answering those questions.

Call us if you are unsure how these rules apply to you. And if you determine that you haven't filed all of the required 1099s, we will help you meet your responsibilities. Just know that the filing of 1099s is separate from the preparation of your income tax return, and there will be an extra cost.

If our fees make you shy away, many online services will help you do it yourself for a few dollars per 1099. We highly recommend the DIY route when the cost looms larger in your mind than the wrath of the IRS — but you only think it does, until we remind you of those horrific penalties.

If the 1099 requirements seem to be all stick and no carrot, they are. But consider this: the IRS uses the 1099 as a check on the recipient's reported income, not yours. Ignoring the reporting requirements means you're sticking your neck out unnecessarily for someone else's benefit — and the penalties are there to drive that point home.

Understanding Form W-9, aka 'What's that LLC?'

When it comes time to issue 1099s, Limited liability companies (LLCs) make everybody nuts. "Well, is it a corporation or isn't it?" As explained in Who gets a 1099?, most corporations don't get 1099s. Everybody else does.

But an LLC can be either/or, which is where people start pulling each other's hair out. Some of them say that all LLCs should get 1099s, incorporated or not. But IRS Form W-9 can help you here.

You can make a W-9 request for a number of reasons, but it's especially useful for examining the nether regions of LLCs. If they fill out the form properly, an LLC will self-identify as one of the following and answer the question for you:

When Do W2s Come Out? What About 1099 Tax Forms?

When do you need to file a 1099As December comes to a close its tax time again, and while some may be dreading paying taxes others are impatiently awaiting W2s or 1099s to file and so they can receive a big fat refund. This leaves two questions gracing Google quite a bit in December and January, when do W2s come out, and when do 1099s come?

Your employer or employers have until February 1st each year to mail your W2 form or forms to you. This does not necessarily mean you’ll receive your W2 by February 1 st , but that it must be post marked by this date. Considering this, you can expect your W2 to come any time after December 31 st when the tax year closes to around February 16th depending on mail speed. Most employers start sending tax forms out in the first week of January, however.

If your W2 has not arrived you should first contact your employer. It’s possible they had an incorrect address and the form was returned. After February 16 th, if you have already contacted your employer you can contact the IRS at 800-829-1040.

When do 1099 forms come out and what if mine doesn’t come?

1099 forms are commonly used for income from a source other than an employer. For example, freelancers usually receive 1099 tax forms rather than W2s. The deadline for post marks on 1099 tax forms is January 31 st . If you haven’t received a 1099 you are expecting you should, again, first contact the payer of the income. After February 15 th, you can contact the IRS at 800-829-1040.

How long do I have to file my taxes?

The deadline to file your taxes or request an extension is April 15 th . This means any mailed tax returns must be post marked by this date. If you are not able to file yet because of missing W2s or 1099 tax forms you need to contact the IRS at the number listed above before the deadline to file passes. You can file your federal taxes without a W2 or 1099 with the help of the IRS.

When can I expect my refund after I file my taxes?

When you receive your refund will depend on when your return was accepted by the IRS. In general, refunds are received within 21 days of receipt. You can check the status of your refund at the IRS Where’s my refund website.

How Do I File a Corrected 1099?

What happens when you report the wrong information on a 1099? You need to issue a corrected 1099 as soon as possible after you notice the error.

As long as the error is for dollar amounts the process is straightforward. All you need to do is fill in the correct information on a 1099 form and check the corrected box at the top of the form. From there you either fill out a 1096 and mail the forms into the IRS or you can E-File the forms. The same rules regarding E-Filing original 1099 forms apply to corrected forms. If you have more than 250 of a specific type of corrected form you must E-File.

Correcting demographic information can be a much more complicated multi-step process so you should contact the IRS for instructions on your specific case.

A software package can help you print and/or E-File corrected 1099 forms.

Advanced Micro Solutions’ 1099-Etc software includes both W-2 software and 1099 software in one package along with optional modules including a payroll software option, AMS Payroll, and a forms filler option, Forms Filer Plus along with two e-file options: E-File Direct and E-File Services.

You can use 1099-Etc to enter your corrected 1099 forms directly into a window that looks like the form itself. The data can also be imported from several outside sources including delimited text files or straight from Excel using copy and paste. You can print out the recipient’s copy on pre-printed forms or plain paper using our optional software generated forms option.

E-File Direct can be used to file an unlimited number of corrected 1099 forms where dollar amounts have been corrected. You will need to register with the IRS and obtain a Transmitter Control Code (TCC) by filing out form 4419 and upload the file to the IRS through the FIRE system.

Advanced Micro Solutions offers a free DEMO so that you can be sure that our software will work for you. Free Technical Support is offered Monday thru Friday from 8 AM to 6 PM central time, with extended hours in January and April.

I Accidentally Forgot the 1099 When Filing My Taxes

by Jordan Meyers

1099s help you accurately complete your tax return.

You do not have to submit a paper copy of your 1099 to the IRS, but you do have to report the income listed on it. Although you're sometimes required to submit a paper copy of other documents, such as your W-2, the IRS does not require you to submit copies of your 1099. On the other hand, if you forgot to include the income information from the 1099 on your tax return, however, you need to amend the return by filing a form 1040X. With a 1040X, you need only make changes to the information you omitted or reported in error and then submit the 1040X to the IRS.

Fill out the basic identifying information on Form 1040X, such as your name, Social Security number, address and filing status. Be sure to indicate the year for which you are filing the amended return.

Fill in lines 1 through 14 on the 1040X by writing the information from your original tax return in column A and the correct amount in column C. For lines in which the two figures are different, write the difference in column B; otherwise, leave column B blank.

Total your payments on lines 15 and 16. Include the amounts you've paid for the tax year on line 15, and place the sum of lines 11 through 15 on line 16.

Determine whether the 1099 information you need to add affects other schedules and attach new, corrected schedules and forms as needed. For example, if your 1099 was from self-employment income, your Schedule C will typically need to be resubmitted using the correct information.

Calculate the amount of your expected refund or the amount you owe in taxes on lines 17 through 21. Refer to any overpayment amount that is listed on your original return to complete this section.

Explain your reason for amending your return in the box provided in Part III of the 1040X. For example, if you forgot to include information from one or more 1099s, state this.

Sign and date your 1040X, making a copy of the original form for your records. The IRS considers unsigned copies incomplete.

File your amended return before the current year's filing deadline to avoid penalties and interest for late payments. The IRS requires taxpayers to pay on time, even when they request tax filing extensions.

Mail your 1040X to the IRS. The IRS does not allow electronic filing of amended returns. The official instructions for the 1040X provide mailing address information, which varies by state.

  • 1099 Forms
  • IRS Form 1040X
  • Your incorrect tax return
  • If you forgot to report income on your state and local tax forms, contact the appropriate agency to learn the procedure for correcting your return. Some state and local tax agencies may require you to mail a copy of the 1099 in addition to correcting your tax forms.
  • If you expect an additional refund because of your amended return, the IRS recommends filing a 1040X after you receive the original refund payment.
  • If the deadline for tax filing has already passed, pay right away to minimize penalties and interest.
  • Never assume the IRS won't notice the missing 1099 income. If you fail to report the income from a 1099, the IRS will most likely catch the error and apply not only the taxes you owe but also financial penalties and interest.

Jordan Meyers has been a writer for 13 years, specializing in businesses, educational and health topics. Meyers holds a Bachelor of Science in biology from the University of Maryland and once survived writing 500 health product descriptions in just 24 hours.

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      A Quicker, Easier Way to Handle 1099 Corrections

      When do you need to file a 1099

      Correcting a 1099 Doesn’t Have to Be Difficult

      Mistakes happen — especially when you’re manually entering lots of detailed numbers in a 1099 tax form.

      Correcting a 1099 used to be a big hassle. First you had to track down the form from the IRS, then you had to fill it out, redeliver it to the recipient and re-file it with the IRS. All that just for one little miscalculation or transposed number!

      Why It Makes Sense to File a Corrected 1099 Online

      Now you can correct 1099 errors (Type 1/dollar amounts only) in a few easy steps. Just pull up the original form online, make the correction, resubmit and eFile4Biz.com will take care of the rest.

      We print and mail a corrected 1099 to the recipient. (Or if you provide the recipient’s email address, we can offer the recipient the option to download the form immediately for faster delivery.) Then, of course, we file the 1099 Correction with the IRS on your behalf.

      For your convenience, we support corrections for the 1099-MISC,

      1099-INT, 1099-S and1099-DIV.

      When do you need to file a 1099

      Avoid Penalties with Prompt and Error-Free Filings

      Due to the possible penalties, it’s essential that you strive for accurate and timely 1099 filings. Should you not file a correct 1099 by the due date — and you can’t show a reasonable cause — you may face a penalty. Penalties apply if you don’t file on time, you don’t include all the required information or you put incorrect information on the form.

      Additional penalties may be imposed if you file on paper when you’re required to file electronically, you report an incorrect TIN (or don’t report one at all) or you file paper forms that aren’t machine readable.

      Prevent Common Errors with 1099-MISC Forms

      A few simple precautions can make a big difference when completing a 1099-MISC:

      • Don’t enter 0 or “none” in any of the boxes (if a box doesn’t apply to your business, leave it blank).
      • Don’t omit the decimal point and cents from entries.
      • Don’t add dollar signs to the money-amount boxes.
      • Don’t make entries that are too small or large – use 12-pt. Courier font, if possible.
      • Don’t use a 1099-MISC to report employee wages! The W-2 is used for this purpose.

      If paper filing .

      • Don’t use ink that is too light to make entries — only use black ink.

      When do you need to file a 1099

      Correct 1099-MISC Forms with Us, Even if You Filed Somewhere Else

      Did you know we support 1099 Corrections, even if you didn’t file the original form with us?

      All you need to do is create an account, add the recipient and select “Correction Forms” from our Filing Center. Submit the 1099 Correction and we’ll ensure prompt delivery to the recipient and the IRS.

      Save Steps by Correcting a 1099 MISC Before We E-File It

      Should you notice your error early — after submitting your order but before we have e-filed your forms with the IRS — you can make the necessary edits for a nominal fee. This immediate action can save you from having to file a 1099 Correction altogether!

      To check if your form is eligible for editing, look for an “Edit Data” link in the Correct Errors column on the Filed Forms page.

      Be aware: Not every situation is open for corrections. If you submitted a form that shouldn’t have been filed, need to correct payer or recipient information, or need to correct any form other than those listed above, you’ll need to contact the IRS directly at (866) 455-7438 or refer to the IRS Guidelines for more information.

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