Form 1099 Reporting Requirements
Section 6041A of the Internal Revenue Code requires that payments made in the course of your trade or business should be reported to the Internal Revenue Service.
The IRS has been working towards increasing the amount of forms that require reporting income as well as enforcing stricter requirements on Forms 1099 and W-9. For your convenience, we have linked the reporting requirements directly from the IRS. (See reporting requirements)
Make sure during the year that you are collecting a W-9 from any vendor or independent contractor you expect to do business with. Even if the vendor is a corporation, it is good practice to obtain a completed W-9 from each vendor to have for your records, should you ever need to produce them to the IRS.
As a reminder the deadlines for 1096 and the corresponding 1099’s are as follows:
- January 31st – Provide recipients with their copy of Form 1099.
- January 31st (changed) – Mail Form 1096 and 1099 to the IRS.
Peter Shannon & Co. is available to discuss with you the tax rules relative to the various informational returns. The responsibility for accumulating the data necessary for the various informational returns and meeting the filing requirements is yours. As you are aware, there are substantial penalties for noncompliance.