Friday, January 4, 2013

1099 Alert - Now or Never!


If you file a corporate, partnership, a limited liability company return, or a sole proprietor on a Schedule C of an individual income tax return, have a rental reported on Schedule E, or file a Schedule F, in all likely-hood you will be required to file 1099 returns even if you have never done so before.

In the past, 1099 forms to corporate entities were exempt, but this exemption no longer applies to 2012. I’d rather be redundant that have you face the wrath of the IRS.

Remember, the technology exists for payments to be traced back to you; the fines have quadrupled, and worse, you may lose the ability to deduct these payments.

1099-MISC Forms: A payor is required to file notice of 
payment for services to any individual paid $600 or more
during the calendar year to both the government and pro-
vider, if that service is used in a business or rental property.
partial list includes, but is not limited to:
·          Accountants/Bookkeepers
·          Attorneys
·          Auto Mechanic/Shop (If you use your car in business)
·          Commissioned Salespersons
·          Computer Service Providers
·          Electricians/Plumbers/Contractors
·          Equipment Repair Service Providers
·          Graphic Art Studios
·          Janitors/Gardeners
·          Medical Care Providers
·          Non-employee assistants
·          Rent paid to Landlord & Property Management Firms
·          Rent paid for Equipment Rentals
·          Tax Practitioners
·          Technical Consultants

The corporate entity exception no longer applies.
Please review all your payees to include corporate entities
that have not been required in the past.
Additionally, you may be required to file these 1099 forms:

FORMS 1099-INT: Interest payments of $10 or more

FORMS 1099-DIV: Dividends paid shareholders from your corporation of $10 or more

FORMS 1098: Mortgage interest received of $10 or more

Due Dates:     To the provider – January 31, 20XX
                            To the IRS – February 28, 20XX

Please contact me no later than January 20, 2013 if you would like my assistance.

2 comments:

  1. Would you provide the irs regs for your statement: "In the past, 1099 misc forms to corporate entities were exempt, but this exemption no longer applies to 2012. I’d rather be redundant that have you face the wrath of the IRS." I've read the 2012 and 2013 irs instructions for 1099 misc and it still says you don't have to report to corporations, only for certain circumstances (attorneys,medical,etc.) Thank you

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  2. Part of the initial law was repealed last year, while we were in The Popeye Express in Canada, I believe. I can't give you the IRS reg right now, but if you rely on the IRS instructions for the 1099-Misc form, you will be in compliance. And yes, you are correct. Only corporations providing legal and medical services need be issued a 1099-Misc. and only if the payment was in conjunction with a business.

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