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Updates!

To ensure uninterupted updates and news delivery, please add russhoskins@hcpaonline.com to your address book.                                                                           Update #2- January 20, 2017

Inside Straight

Inside information. Straight answers.

Hoskins Quiros Osborne & LaBeaume, CPA, LLC

"Life can be taxing. We can help."

 

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JANUARY IS A BIG MONTH!

 

Steep Penalties If Your 1099’s Are Late!

With sharply increased information reporting penalties in their second year (as high as $260 per late Form 1099), timely issuance of Form 1099s has become imperative for many businesses. The urgency for timely reporting is compounded by the continued presence of questions on Forms 1065, 1120, 1120S, and 1040, whether the taxpayer made any payments in 2016 that would require the taxpayer to file Form(s) 1099. Starting this year, taxpayers also face earlier deadlines for reporting W-2 and 1099 information to the Social Security Administration and the IRS.


 

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Penalties If 1099 Incorrect:

  • You MUST file a informationally correct  return by January 31st.
  • You MUST file electronically if you are required to file electronically. You will be penalized if you file on paper when  you were required to file electronically.
  • You must report a taxpayer identification number (TIN). AND IT MUST BE ACCURATE.
  • If you are required to file paper forms, they MUST BE legible and machine readable .
  • You MUST also provide a correct Payee Statement by January 31st!
  • The Payee Statement MUST contain all required information on the statement!
  • You can be penalized if you provide incorrect information on the Payee Statement

 


 

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Do You Need To File 1099-MISC?

The Form 1099-MISC is probably the most filed Form 1099 of the series. You must file Form 1099-MISC, Miscellaneous Income, for each person (subject to the exceptions listed below) to whom you paid during the year:

  1. At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;
  2. At least $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) purchased from anyone engaged in the trade or business of catching fish, or, generally, the cash paid from a notional principal contract to an individual, partnership, or estate;
  3. Any fishing boat proceeds; or
  4. Gross proceeds of $600 or more paid to an  attorney .

 



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The Cost of Inaccurate 1099's Varies

The penalty rates for failure to file correct information returns and/or to furnish correct payee statements depend on how late the correct Form 1099 is filed and can range anywhere from $50 per return to $260 per return. The per-failure penalty is $530 for a taxpayer who intentionally disregards the filing requirements for information returns and payee statements.



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Your business is appreciated and your referrals are welcome. The general information in this update should not be acted upon without first determining its application to your specific situation. For further details on any  article, please contact us.

Inside Straight Newsletter © Copyright 2017 Hoskins Quiros Osborne & LaBeaume CPA LLC. All Rights Reserved.

 

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