At Tom Vignali CPA, Inc., we’re reminding clients about 1099s to ensure they meet this obligation for all payments of $600 or more to unincorporated individuals and businesses. Such payments include rents, remittances for services rendered, and professional fees. Failure to issue and file 1099s can result in penalties and an inability to deduct expenses incurred.
The deadline for issuance of 1099s is January 31 for the preceding calendar year. The deadline for filing these forms with the IRS is February 28.
The most commonly issued forms are 1099NEC and 1099MISC. Payments to unincorporated individuals and businesses, including attorney fees, are reported on form 1099NEC. Rents paid to landlords are reported on form 1099MISC.
Note these upcoming changes
Individuals and business owners should be aware of the following upcoming changes due to current legislation. Starting in 2022, businesses that accept credit cards will receive a 1099K from their third-party processor if they have not already. Starting in 2023, taxpayers who conduct digital asset transactions will receive a 1099-DA annually.
We suggest businesses do the following as year-end approaches.
-
- Review disbursements to vendors, including landlords, attorneys, accountants, etc.
- Request W-9 forms be completed by all vendors to determine their entity type. Best practice is to obtain W-9s prior to issuance of payment.
- Summarize information necessary for preparation of 1099s based on the above.
Tom Vignali CPA, Inc. prepares and files 1099 forms for many clients. Should you need assistance, feel free to contact us.
Contact Us:
Thomas W. Vignali CPA Inc.
118 Point Judith Road
Narragansett, RI 02882
T: (401) 415-0798
tom@tomvignalicpa.com
www.tomvignalicpa.com
Find Us On: