Starting for 2016 filing, payments made to independent contractors must be reported to the IRS on Form 1099-MISC by January 31. Previously, businesses had until the end of February to submit their forms by paper, or the end of March, if filing electronically. The IRS changed the deadline to have more time to combat fraud.
Businesses use Forms 1099-MISC to report payments to independent contractors that exceed $600 in a year. Forms 1099-MISC are issued for payments made for services, not goods, in the course of your trade or business.
To generate a 1099-MISC form, you must obtain a W-9 form form each independent contractor that does work for you. This is a signed form for your file and it is not filed with the IRS. The W-9 form provides to you their full name or name of their business, address and appropriate taxpayer identification number. It also tells you what type of entity they are. If the business is a corporation, then a 1099-MISC is not required unless you pay a medical or law firm operating as a corporation.
You can request a one-time, 30-day extension to file Form 1099 by filing Form 8809, Application for Extension to File Information Returns. This extension has to be filed by January 31st. Extensions for W-2 filings will only be granted in dire circumstances.
Now is the time to confirm that you have all the W-9 forms completed and signed by any independent contractors that you paid in 2016.
The information above was provided in the November newsletter produced by:
Gail Rosen, CPA, PC
2032 Washington Valley Rd.
Martinsville, NJ 08836