As the 2018 tax filing season approaches, it’s important to get organized to ensure timely filing of your informational returns. Since the Protecting Americans from Tax Hikes (PATH) Act, the due dates for Forms W-2 & W-3 and Form 1099-MISC issued for Non-Employee Compensation (Box 7) have been moved to January 31. This will be the third filing season under these new rules.
Here’s three tips to help you get organized, avoid penalties, and ensure accuracy of your filings.
- Ensure you have a completed and signed Form W-9 from all contractors. If the W-9 you currently have on file is over a year old, I recommend verifying with your contractors that the information (specifically addresses) on this form is still accurate.
- Reconcile contractor payments inside of your accounting system. By using the vendor functions found in most accounting info systems, you can quickly arrive at the total amounts paid to specific individuals or businesses.
- Review the filing requirement rules. Two commonly overlooked provisions include:
- The corporation exception: generally payments to corporations (including LLCs taxed as “C” or “S” Corporations) are not reportable payments for purposes of filing Form 1099. However, there are five exceptions to this rule, the most common exception is the mandatory reporting of attorney’s fees in Box 7, regardless of organizational or tax structure.
- Other exceptions: payments for merchandise, telephone, freight, storage, and similar items typically do not require filing Form 1099-MISC
For assistance filing Form 1099, please contact our office.